Barca can restore their four-point lead when they visit Celta Vigo.
Madrid had only won one of their past four La Liga games before the international break, but coach Carlo Ancelotti was able to welcome back James Rodriguez for the first time in two months from injury.
The Colombian World Cup star was heavily involved as Madrid dominated throughout, but it was Granada who had the first clear chance when Ibanez clipped the outside of the post after pouncing on a poor clearance from Iker Casillas.
Chances soon began to flow at the other end and Bale was first to capitalise when he latched onto Toni Kroos' through ball to round Oier Olazabal and slot home from a narrow angle.
Rodriguez then sealed his comeback with a lovely assist with the outside of his left foot to allow Ronaldo to curl home his first of the afternoon.
The Portuguese soon made it 3-0 by lashing home from close range after Olazabal had spilled a cross to move ahead of Lionel Messi in the battle to be La Liga's top scorer.
The World Player of the Year was far from finished, though, as he sealed an eight-minute hat-trick with some more help from the Granada 'keeper as he couldn't keep out his drive from 20 metres.
Granada offered embarrassingly little resistance after the break as Benzema was given plenty of time to control a corner from the left and fire home to make it 5-0.
Bale then unselfishly teed up Ronaldo to nod home his 46th goal of the season, although there was a brief scare for the home fans as Ronaldo collided with the goal frame but was soon back on his feet.
More shocking defending from Granada allowed Benzema to saunter through for a seventh barely 60 seconds later.
Ancelotti then took the chance to remove Kroos, Rodriguez and Benzema ahead of a busy month including another six league games and a return to Champions League action for the European champions.
- AAP
