Doesn't 'it' refer to both inanimate objects and animate objects (animals)? Or is 'inanimate' a kind of term of art here refering to humans and human-like beings (instead of the more common meaning of 'non-living')?
In English, many animals are referred to with "he" or "she". Being a mammal, large, being domesticated, being familiar, are all more likely to be animate rather than inanimate. A pet mare is going to be "she". Insects are always "it". Livestock or a reptile might get either. Babies sometimes get treated as inanimate. ("Is it a boy or girl?")
I'm not quite sure how much credence to give his opinion considering that his expertise was in pain, misery, and shooting guns rather than linguistics and grammar, but he certainly had strong beliefs on the subject, and I wasn't going to try to convince him otherwise.
It's not a grammar rule, it's a social rule.