The saying is typically used when someone is rushing in to something. It is often combined with linked idioms such as, cool your jets, or look before you leap. However it also has a more literal meaning and in certain circumstances is the preferred idiom to use. "Hold your horses" literally means to keep your horse (or horses) still, which would be used when horse riding, or driving a horse-drawn vehicle. Thus it is very easy for someone without previously hearing the expression to understand its meaning. Someone is to wait for a moment. It is usually followed up with an explanation to demonstrate why they should wait. For example, "Hold your horses, you haven't thought about this yet."
2 weeks ago