Your description sounds like the film "Un Amico" (A Friend), an Italian film broadcast in 1975. A boy named Sergio runs away from home after his father threatens to sell his dog Sausage. The boy and the dog have a series of seaside adventures, until they meet up with three other kids. The group steals the sailboat belonging to the father of the two siblings, and after falling asleep, they end up shipwrecked on an offshore desert island. A day later, three men show up in a rowboat. Among the three men, Sergio finds an unusual friend: a "Professor" hunting for buried treasure. The "Professor", in reality, happens to be one of three recently escaped convicts.
The part you remember about the wooden horse sounds like a sequence from "The Little Wooden Horse", but perhaps this film had a similar scene. Unfortunately, I could not tell you where to get this, for some reason the Italian films are difficult to locate.
I remember seeing a CCFF showing of a child and his dog "Sausage". The film looks to be in the early 60's.
He eventually goes on a boat trip leaving his dog at the dock, telling it goodbye for now..or something like that. Later my memory seems him on a wooden horse in some magical sequence.
Can't remember anything else - but I was wanting to know if anybody knows the title of the film?