A year ago, I submitted a novel to a major publisher. It was denied, though with a short letter with a few comments from the editor & a note she liked my writing style and wanted to see more from me.

I'm looking to shop this book around to some agents now that I've had a chance to do a few minor rewrites. Unfortunately, the publisher that rejected it is the largest publisher who handles that sort of book, and it's really a limited field -- maybe a dozen or so publishers at most.

Do I disclose that this book has been rejected once by this publisher in the query? How do I handle this? Obviously, the agent needs to know.