There's a battle formation mod in the mod pack compilation for EB 1.2. You'll find it in the unofficial modding section of this forum.

Basically it makes the AI use formations, march in formation and engage in formation. They will also attempt to send skirmishers to attack your flanks, and other units to engage your flanks when the lines have met.

It's far from perfect, and in some instances it even makes the AI behave worse. When using phalanxes, for example. If your main line consists of phalanx troops, the AI will slowly march their front line toward you and engage your line, and will be slowly but surely demolished man by man. They will send one or two units to engage your flanks in the process, but they are easily seen off, and they still suicide-charge with their generals and family members.

It also forces most AI units into guard mode, including cavalry, so once they engage they from crazy lines. Line your line, which will stretch across from left to right, once they engage their unit will form up from top to bottom, so your main line is engaging their flank. They're outflanking themselves for you!

However, this is the best you're going to get from the RTW AI. The AI is stupid, and that can't be changed. It can be tweaked, so that they are forced to keep formation, but you're simply re-arranging the deck chairs on the Titanic. The thing is still going to sink, it will just go down neat and tidy looking.