Blocking bottom of siding to prevent mice?

I noticed mice hopping into both of my neighbors house from the side of the houses right behind the siding, entering from the bottom.

I had 3 mice a few weeks ago, and I'm going to assume they could be entering in the same fashion.

Is there a way to block the underside of my siding? I believe it may need to breathe/let out water, no?

If I can just block it, I can probably just use some sort of thin sheet metal or maybe even wood with periodic inspections, and glue it on all around, but I'm worried about trapping water.