Rally Trops

I just wanted to know, does the rally troops action also raise morale?

For example: My general is fighting alongside some lesser troops and they are wavering, if I click the rally troops, could they go up to steady or something?

In my experience, the presence of the general steadies morale, and the rally function also lengthens the time it takes for a unit to rout, but does not significantly affect morale. In other words, that "shaken" unit might not rout if you toot your horn, but if something pushes them over the edge, they will anyway. So they maintain the level of morale that they have, but their morale will not lower any further due to normal combat. It would take another devastating blow or the death of the general to cause nearby troops to rout right after a rallying cry.

Some techno-geek feel free to correct me with the game's own data, if I am mistaken.

Not really.

Rally troops has 2 functions.
1 is to boost very slightly (around 1 point) of morale to nearby units.
2 is to stop units already routing from continuing to rout. This only works if the unit is not near any enemy unit and is not currently taking losses. Also, there is a minimum amount of time a unit routs. Something like 10-20 seconds or so.

Is there a minimum distance at which the rally superpower is effective ? Because it only works about 1/20 times, so I got a habit of chasing my routing units with my general and only blow the horn while very close to them, to make sure they hear it ~:). Needless to say, this requires micromanagement, so I wanna know if I'm being dumb for doing this.
Is there any way of increasing the effects of the horn blow ? As it is right now it's almost useless, basically in the same bucket with other "features" like wedge formations etc.

Well, the tiny morale boost does help at times. And rarely, when you have your troops chain routing but not a lot of pursuers, it can turn the tide.

So Rally troop action is useless? Beqacuase I fight with my general, so he's always in the thiubnk of it, so whenever I use the rally trioops it won't wrok, that's why I asked, just to help the guys fuigting with him.

I wouldn't call it useless. FactionHeir knows his stuff, so I expect that his estimate of 1pt morale boost is accurate. While 1pt isn't much, it can make the difference if both lines are close to breaking.

Maybe, but it doesn't help my style of battle.

It helps from time to time, but I only use it really when my troops have been charged with heavy cavalry.

Well I use it most of the time just for fun...
The sound of the horn is cool but not as much as richard the lion heart roar!!!
(as seen in the crusaders campaign preview)