Saturday’s 2-1 defeat at bottom club Norwich was a ninth loss in 13 Premier League matches, with the Toffees winning just once during that spell, and left the club just six points above the relegation zone.
It was the Canaries’ first league win for two months and only their third of the season and lifted them off the foot of the standings.
It was reported that Everton held an emergency board meeting on Saturday night at which Benitez’s future was discussed, with the decision to sack the Spaniard announced on Sunday afternoon.
Potter has impressed since taking over at Brighton and the Seagulls are ninth in the Premier League. Potter team play an attractive style and former Swansea manager has a reputation of bringing through young talent.
Albion have also recorded impressive results against the league's top teams.
Wayne Rooney, Duncan Ferguson, Frank Lampard and Roberto Martinez are among the bookmakers’ early favourites to succeed Benitez in the Goodison Park hot-seat but Potter is also under consideration.
Potter enjoys a great working relationship with the board and chairman Tony Bloom - he is contracted with Brighton until June 2025.
Fomer Liverpool defender and BBC pundit Stephen Warnock believes Potter would be an ideal candidate: "The choice that I would look at - and Brighton fans won't thank me for saying this - but it is Graham Potter.
"Everton fans want an expansive style of football and you would get that with Graham Potter. He is really good at man management and he is very calm.
"Wayne [Rooney] will get a mention, but is up to him where he feels he is at if he is offered the job and I think it would be difficult for him to turn it down.
"From the fans' point of view, it is whether he is experienced enough from his time at Derby, but he would certainly have the respect of the fans and the players, that would come with the job."
An Everton club statement read: “Everton Football Club can confirm the departure of Rafael Benitez as first-team manager.
“Benitez, who joined Everton in June 2021, has left the club with immediate effect.
“An update on a permanent replacement will be made in due course.”
This is a good read: Brighton transfer window current state of playEverton fans at Carrow Road were furious with the team’s performance, expressing their views with chants and banners that the former Liverpool boss should not remain at the helm.
One supporter invaded the pitch in an attempt to confront Benitez, while at the final whistle a chorus of “sack the board” was heard as Everton fans booed their own team.
Benitez was appointed Everton manager in June 2021 – a highly controversial move given his previous time in charge of Liverpool.
It was a major gamble by club owner Farhad Moshiri, and it has not paid off.
Moshiri last month stood by Benitez, stating that the 61-year-old would be given time to get things right with new signings and injured players coming back.
However, the return of players like Dominic Calvert-Lewin has not seen an improvement.