The crowded beach was closed for 45 minutes on Tuesday morning after the incident, which occurred at around 11am according to local Spanish news website Información.es.
The boy was bitten after spotting the fish through his goggles while swimming and "trying to touch it" according to the town councillor in charge of beaches and citizens' security, Lorenzo Martínez.
The 10-year-old boy, who has not been named, described the fish as about half a metre long and "grey and green in colour".
According to local police the boy was treated by medical staff on the beach but did not need to be taken to hospital.
The fish "span around and bit him above the waist," according to Martínez.
The beach was immediately closed following the incident while police and a local boat crew tried to find the animal, but they "saw nothing" so the beach was reopened less than an hour later.
While the fish is currently unidentified, it could be a barracuda, according to sources from Benidorm's town hall.