Blood Beast is a common name given to ordinary animals driven mad in the area around the Plains of Blood and Salt. They are magical in nature (infected by dark energies left over from the many battles there) but not considered Mystical Creatures. Most Blood Beasts begin as common apex-predators (wolves, coyotes, mountain lions, etc.) and are changed by the Magic of the area.
Reports of humans tainted by magic after staying too long on the plains have gone unsubstantiated.
Blood Beasts were common during the Mage Wars, and were still found centuries into the Golden Age in areas where the battlefields had not been cleaned up and redeveloped. By the mid Third Age, they were virtually extinct, causing many historians to dismiss them as myth.
Herbet Patric Galactis, of course, put an end to this when he published the Accepted Histories, which included numerous first-hand accounts and even quotes from old field guides. The debate was quickly put to rest.