Shigeru Miamoto wanted to make Mario a steed, but he couldn't for a while because it wouldn't work on the NES. He first appeared in a game called Devil World, however, called Tamagon. Tamagon and Yoshi are both dinosaurs that can swallow enemies whole. He started planning for Yoshi while he was making Super Mario Bros. 3. He put the frog suit and raccoon tail in it instead of Yoshi. He put him in Super Mario World. Yoshi got so popular in that game that the sequel to Super Mario World was based around him.
An art of Yoshi in Super Mario World
An art of the concept of Yoshi