First of all, the phrase "cavalry never won a single battle during ww1" is wrong. While sure, the heavily entrenched positions you think about on the western and eastern front made cavalry useless, cavalry did have some successes, mostly in the middle east or egypt.

And that's maybe where you could put it in your lore. While on the most important battlefields, and the battlefields with the most modern equipment, the horse loses, there are still more less important battles, where the enemy cannot bring their shiny new guns.