Palace went behind to a stunning Philippe Coutinho free-kick, but Benteke struck either side of half-time against his former club as Sam Allardyce's Eagles claimed another big win after beating both Chelsea and Arsenal in recent weeks.
Anfield has been a happy hunting ground for Benteke, who has now scored seven times in eight matches against the Reds and has one more goal at the home of the Merseysiders as an opposition player (five) then he managed during the 12 months he played for them there last season.
His performance overshadowed that of Philippe Coutinho, whose brilliant free-kick had given Liverpool the lead, and virtually ensured Palace's top-flight status for another season having reached 38 points in a remarkable turnaround under Sam Allardyce.
Conversely it has opened up Liverpool, still in third, to the unpalatable prospect in these parts of being caught by Manchester United in the race for a top-four spot.
Jose Mourinho's side won at Burnley earlier in the day to move to within three points of the Reds with two matches in hand - which is the same number as fourth-placed Manchester City have with only a two-point deficit.
It has even left the door ajar for seventh-placed Arsenal, nine points behind with three matches in hand, and all because Liverpool yet again failed to deal with a team who were intent to sit back and soak up possession.
Coutinho took a while to warm up but when he did it was worth waiting for. Felled by Luka Milivojevic he picked himself up to curl a inch-perfect free-kick over the wall and just inside Wayne Hennesey's right post.
It was the Brazil international's 10th Premier League goal of the season, the first time he has reached double figures since arriving in England and - since his Premier League debut in February 2013 - only Yaya Toure (14) has scored more goals from outside the penalty area than his 13.
But, for all the plaudits heading Coutinho's way, the sub-plot involved Benteke, a man who now has six more goals for Palace this season than the 10 he managed in his solitary year at Anfield.
Having signalled an early warning by rolling one shot just wide of the post and then being booked for diving in the penalty area, his inevitable goal arrived two minutes before the break.
Full-back Joel Ward's ball down Palace's right flank capitalised on the space left by James Milner and centre-back Dejan Lovren got caught the wrong side of Yohan Cabaye, allowing the Frenchman to cross first-time for Benteke to blast home from close range.
The striker's celebration with another Reds misfit Mamadou Sakho, ineligible against his parent club but sat among the substitutes, did little for any remaining goodwill Anfield may have had for either.
Coutinho appeared to take the equaliser as a personal affront and in the second half set about trying to restore Liverpool's lead with a darting run past several Palace players, only ending when James Tomkins threw himself in the way of a shot destined for the back of the net.
The rarest of things, a Coutinho header, was inadvertently deflected into the arms of Hennessey by Divock Origi while Roberto Firmino just failed to get a touch to divert Lucas Leiva's through-ball past the goalkeeper from their next attack.
Entering the final 20 minutes the game became scrappy, exactly the way Palace like it, and from one scramble in the penalty area Yohan Cabaye blazed over.
Benteke spared his blushes, and embarrassed his former employers, by stooping to head in a corner - needlessly conceded when Lovren gave away possession on halfway - five yards out with 16 minutes to go.
Reds boss Jurgen Klopp had few game-changing options - he named 17-year-old Rhian Brewster, born in April 2000 on the bench because of injury to Daniel Sturridge - and Liverpool failed to threaten in what was left of the game.
Additional reporting by the Press Association.