Yes. Give notice, be sure you’re fulfilling your obligations under the lease for the remainder of the time period. Take little baggies of apple treats to the new friends you’ve made for their horses and tell them you’ve enjoyed getting to know them and hope you see them again. Do not lie or make up an excuse. No excuse is necessary. You’re moving on. Tell the b**ch you’ve loved her horse - if you do - and thank her for opportunity. She has to walk around in her own cloud. You don’t.
You don’t need to “satisfy” anyone.
Who cares if they’re “satisfied”?
Tell them it wasn’t working out, that’s your final answer, and they can die wondering but you’re done with this conversation.
I’m not sure why OP you worried about what the owner will do or say. You said in your post
the owner will probably respond by telling me that she’s glad, she’s been trying to get me off the lease for months
. So if the owner is trying to get you to quit the lease you there doesn’t really need to be any conversation afterwards. Give your notice to terminate the lease. I would also recommend weaning yourself from riding the leased horse… you can include some sentiment like “I’d like to try to get out to ride Dobbin until the lease ends if my schedule allows” Period. Unless your barn is a total gossip-fest, I don’t think people will be all up in your business about ending the lease - other than maybe an “oh that’s too bad” or something like that. If they knew the owners is bonkers, they’ll also know why you ended the lease.
It’s amazing how little other people really care about our horse and life decisions, unless we make a big deal out of it.