Benzema is among the favourites for the award for 2021's best male player when it is handed out in Paris next month, alongside Lionel Messi, Robert Lewandowski, Jorginho, Cristiano Ronaldo and N'Golo Kante.
"He deserves to win the Ballon d'Or. He is an incredible player," Zidane told France's Telefoot on Sunday. "I had the great honour of coaching him.
"He knows how to do everything on the pitch. He's above the rest. I hope he can be rewarded with this Ballon d'Or."
Benzema has had a flying start to the 2021-22 season with Madrid, scoring nine goals and providing seven assists in LaLiga -- more than any other player in both categories.
That follows a 2020-21 campaign in which he scored 30 club goals, although Madrid ended the year trophyless, finishing second in LaLiga and were knocked out of the Champions League semifinals by Chelsea.
"Right now he is on a cloud," Zidane said. "I would give him the Ballon d'Or."
Benzema told ESPN last week that he believes he is "not too far" from winning the prize, which was not awarded in 2020 due to the coronavirus pandemic.
While Madrid boss Carlo Ancelotti last month backed the 33-year-old to win the Ballon d'Or.
"There are various candidates who could win it this year," he said. "But for me, for sure Karim is one of them.
"I hope it happens, he can win it, because he deserves it for how he has played this year and during his career, how he has played over the years and especially recently.
"He has always been at a top level but he's finally won a trophy with France which is important to win this prize, so for sure he is one of the candidates and let's hope he wins it because he deserves it for me."
"Injuries and disagreements in the last few seasons with Zinedine Zidane have held him back," Barnett told The Mirror. "He went back to Real Madrid [after a loan at Tottenham Hotspur last season] and he was in the first team immediately.
"Unfortunately he tore his hamstring so it's a long way back. It's a shame with Carlo Ancelotti back as manager."
Bale is expected to be back in action next month.