Almost the entirety of The Red Pony takes place on the Tiflin ranch, which lies between the Gabilan Mountains and the Great Ones. The Tiflins have a house, a few barns, a corral, a bunkhouse, and acres and acres of fields.
Let's get a glimpse of the scene:
[Jody] went on to the sagebrush line where the cold spring ran out of its pipe and fell into a wooden tub. He leaned over and drank close to the green mossy wood where the water tasted best. Then he turned and looked back on the ranch, on the low, whitewashed house girded with red geraniums, and on the long bunkhouse by the cypress tree where Billy Buck lived alone. […] The sun was coming over the ridge now, glaring on the whitewash of the houses and barns, making the wet grass blaze softly. Behind him, in the tall sagebrush, the birds were scampering on the ground, making a great noise among the dry leaves; the squirrels piped shrilly on the side-hills. (1.14)
Talk about a country paradise. There's always something to look at and some creature scuttling around. Clearly, this is an idyllic place for a young boy to grow up in. Jody's got all the space he needs to let his imagination run free.
And remember, Steinbeck was a local hero. He grew up in a place a lot like the Tiflin's ranch, so he's on familiar ground in The Red Pony. He knows what it means to be a little boy, growing up in this rough and tumble, rural world. So we can sympathize with Jody, who has all the freedom of a farm boy, but none of the worldly experience he wants, because he's stuck between two mountain ranges, dreaming of elsewhere.