The on-loan forward's excellent third-minute strike saw Unai Emery's side return to winning ways and move provisionally to the Primera Division's summit ahead of Sunday's games
Valencia won their first three Primera Division matches this season, before a creditable 2-2 draw at home to Barcelona in the fourth round of fixtures, but Unai Emery's side then went down by a single goal at Sevilla last weekend to lose its unbeaten record.
The Costa Blanca club drew at home to Chelsea in the Champions League earlier this week, thanks to Roberto Soldado's penalty three minutes from the end.
In this match, though, they were ahead within three minutes of the start, as Canales fired an inch-perfect, left-footed, angled drive into the bottom right-hand corner from the edge of the box to get the locals off to a perfect start.
Jeremy Mathieu then shot wide and Roberto Soldado saw a header saved as Valencia looked to make it two, but Dani Benitez forced Vicente Guaita into a fine stop at the other end as Granada responded.
Canales opted to shoot instead of passing on a quick counterattack after half an hour and Ever Banega saw his long-range effort saved by Roberto just before the break.
Valencia found themselves on the back foot in the second half, though, as Alex Geijo came close for the visitors and Inigo Lopez almost silenced Mestalla as he headed against the crossbar.
Soldado was unable to divert Jonas' cross into the net as he slid in after 67 minutes and the Brazilian twice tested Roberto in the closing stages as Valencia sought a decisive second goal.
But Canales' effort proved sufficient in the end and Valencia sit joint-top alongside Malaga with 13 points ahead of Sunday's games.