Animal Lore affects your ability to control a tamed creature, and also improves the amount of damage you can heal via the Veterinary skill.
Using the skill directly on a tamed creature shows you a listing of it's stats, resists, skills and elemental damage distribution. At 100 skill points you may target untamed animals as well, and at 110 you may view information about untamed monsters.
Animal Lore also counts towards your total stable slot limit.