Anfield's manager, now 49, was coaching Real Madrid's youth teams in Spain when the tragedy happened on April 15, 1989, leading to the deaths of 96 Liverpool supporters.
With the 20th anniversary of the disaster coming up on Wednesday, Benitez said: "In Spain we didn't really realise the real problem initially, but after hearing the stories on the news we then realised the full extent.
"But after I became Liverpool manager in 2004 I have received a lot of information from the people and staff at the club, so it has helped me understand just how important it is for the people here."
Now Benitez believes Liverpool's foreign players should also fully understand the tragedy that has changed the face of the club and football in England.
He said: "It is important not just for the foreign players but everyone in football. It was a tragedy that was so important, it is vital it is remembered.
"I think that for the fans of football in any country, for any club, it is important to remember what happened."
Benitez is a strong family man, and he says: "You look at your own daughters and imagine what it would be like for yourself, it is then you realise what a disaster it would be to be involved in something like that.
"You think about this when you are reading the names (of the 96 who died), you see the families and you can see what it means for everyone.
"I have been really impressed with the families and the effort they are putting into retain good memories of the victims of Hillsborough.
"The families are doing really well trying to keep the good memories of the people, and you can see the staff here have always been there for them, and will always be there trying to support the families, the club will always be behind them.
"The first time I attended the memorial service I was amazed to see the people and the respect they showed. Every year when we go it is similar because you can feel what the families are feeling."