One good thing about a flat terrain is that you can make your own shadows using flat plains, especially with a fixed light source and directional lighting, it should be quite effective and nothing like the trouble or performance cost of a proper shadow calculation.
I would be more worried about animated horses - I guess you could just use several models and switch between them - it'd mostly be a running cycle so that would be doable. AGKv2 has support for animated models, but AGKv1 only has static models, so you would have to come up with your own method.
A normal map shader should be possible, I was actually thinking about making one for AGKv1, just to see how it can be done - I'd probably do it wrong but I am sure it would work.
I am the one who knocks...