Araldo has become the second horse to die after the Melbourne Cup.

It was euthanised due to injuries sustained when it was spooked by a flag-waving patron after running seventh.

Pre-race Melbourne Cup favourite Admire Rakti died in his stall after the race.

The seven-year-old galloper, which won the Caulfield Cup in brilliant style last month, was second into the final straight but faded badly and went back through the field to finish last in the 22-horse race.

It was reluctant to enter the gate prior to the race, kicking out with its hind legs.

Admire Rakti. (AAP) ((AAP))

Admire Ratki pictured coming last in the Melbourne Cup

Chief Steward Terry Bailey said officials had vetted the horse after the race, as it was unusual for a favourite to come last.

"We were certainly on to it, but in the process of going back to the stalls, the horse passed away," Mr Bailey said.

"Our vets are on hand, and the horse will undergo an autopsy to find out what happened."

Japanese race officials and the horse's owner had been alerted to the death.

German-bred stayer Araldo was suspected to have shattered a bone while returning to scale, after taking scare.

A patron is understood to have waved a flag which prompted the horse to shy, putting its foot through a fence.