Bennett had paid a tribute to Key, who put her into Cabinet in 2008 and drew her into his kitchen cabinet - the core group of ministers who counselled him - after 2014.
Key told the Herald Bennett had played a "tremendous part" in his government.
"She was a likeable face of the National Party, who connected with people from all walks of life. She has a very bubbly, energetic personality and was a great asset to the party."
Asked if he would be one of her referees for future job applications, he said "I would happily be her referee."
Bennett's decision to leave came after Todd Muller and Nikki Kaye rolled Simon Bridges and Bennett as leader and deputy leader.
Bennett was also removed as the party's campaign chair and replaced by Gerry Brownlee.
Bennett had risen to deputy prime minister under Sir Bill English after Key stepped down, and had stayed in the deputy role under Bridges back in Opposition.
At a press conference to announce her departure, Bennett said she had never hankered for the top job herself and believed her own skills in organising were best suited for the deputy role.
She said it had been a "hell of a ride".
"I am particularly proud of my work as Minister for Social Development and Child Youth and Family for more than six years.
"Many think being a minister is a hands-off role. I loved being hands-on. I implemented those reforms, drove the change and the daily execution, and most importantly, saw people's lives and livelihoods improve."
She defended those welfare changes, which were criticised by Labour.
"There is an expectation that a lifetime on welfare is an option for people, and almost feels encouraged when it should be a back-stop that is there if you need it."
Bridges said Bennett's retirement from politics was a "big loss".
"Paula will be a big loss for National and national politics. She has been a massive part of the life and soul of our party for a long time now.
"No one would dare sum her up in a word or two but her experience, nous, loyalty and sense of fun are irreplaceable. I couldn't have asked for more from a deputy and am sad she is going."
Bridges confirmed to the Herald that he was staying in politics.