Yes, I believe Equestria is located on Earth. You see France,
http://smartraveller.gov.au/Maps/France.gif
and Equestria.
http://vignette3.wikia.nocookie.net/mlp/images/c/cb/Map_of_Equestria_April_2013.jpg/revision/latest?cb=20130403195243
They seem pretty much alike. Or if that isn't it, Equestria is just another Earth in another dimension where ponies take charge.