Use curves. Curves is your friend.
(based on Color Correcting Digital Images chapter in The Photoshop CS2 book by Scott Kelby)
Open the image in CS2.
Select the eyedropper tool. On the option bar (below the menu) there is a selection for sample size. Select 3x3.
Open Curves from the adustments menu.
Before you do anything else we need to set some preferences in the curves dialog.
Doubleclick the black eyedropper tool. Enter 20 for R, G, and B values. Click OK.
Doubleclick the white eyedropper tool. Enter 244 for R, G, and B values. Click OK.
Doubleclick the midtone eyedropper tool. Enter 133 for R, G, and B values. Click OK.
Exit curves. When it asks if you want to accept the new defaults click YES.
If the layers palette isn't open hit F7 and open it.
Click on the dropper tool in the tool palette. Hold the left button down until the alternative selections appear. Select the color sampler tool (middle one).
Click on the white and black circle in the layers palette and create a threshold layer.
Slide the slider all the way to the left. Slowly bring it back to the right until a dark area begins to appear (unless there already was a black area). This is the darkest part of the image is. Click Ok to close the threshold dialog. Now that you know where the shadow area (darkest part of the image) is you can mark it. Make sure that the background layer is selected by clicking on it in the layer palette. Select the dropper tool (should be the one that is available). Click in the dark area. A target will appear with the number one. Re-open the threshold layer by double clicking on the box closest to the eye. Slide the slider all the way to the right. Slide it back to the left. The first area that shows white is the lightest part of the image. Make sure the background layer is selected. Select the dropper tool. Click on the white area. A target will appear with the number two next to it. Close the adjustment layer. At this point you can drag the adjustment layer to the trash can. You don't need it anymore. Hit CRTL-M to open the curves dialog. Select the black dropper and position it exactly over the first target. Click the target and that will correct the shadow area. Click the white dropper and click exactly on the 2nd target. That corrects the highlights. Now click the midtone dropper. This one is a little tougher. You are looking for midtone gray in the image. At first glance there doesn't appear to be a midtone gray in your image. Not so. Zoom in to the scab on the horses nose. There is an area that has midtone gray in it. It's kind of a dark gray.
One more thing. Select the midpoint of the curve in the "curve graph". The number under input should be 128. If it isn't, change it to 128. adjust the number in Output up or down to suit your eye. Or you can slide the square on the graph up or down. Or you can use the roller ball of your mouse by selecting the output box and rolling it up or down to adjust the image.
Close curves. Save.
I upsized your image (Image-Size. Change one of the values to something larger. Change resolution to 360. Change Resample Image Bicubic to Bicubic Sharper. Click OK). Did a little sharpening (no time for that one, sorry), and here it is. Not perfect. But a little better and balanced.
