MTG was a big fat fail for my gelding who had what sounded like a similar situation. It actually made it worse - shedding giant sheet-like flakes of skin. Unfortunately, there’s a lot of stuff in MTG for a horse having some sort of skin sensitivity flare up to react to (or a horse who has sensitive skin in general) so I’ve actually never preferred it for situations like this.
I would identify what the root cause of the situation is. Is it something icky fungal? Or is it just dry skin? Coconut oil might be a good (and cheap) option if it’s just dry skin. Banixx is wonderful if the cause of the situation is some sort of crud. Mix and match to see what works for you. (Equiderma skin lotion is another good thought.)
My tough spot was the dock of the tail - crud and gunk and thicker product was hard to work in all the way through so spray-in leave-in applications were preferred. That said, if you get a nice day of weather I would use some mild shampoo to try to wash and de-gunk the area entirely before winter really sets in… it might help you start off on a clean slate.