Nadal has now won 15 matches on clay this season without encountering a loss. He has also won titles in Monte Carlo and Barcelona in recent weeks.
With such an impressive run, the 14-time Grand Slam champion is now the hot favourite win the French Open.
The win in Madrid also has also propelled Nadal to fourth in world rankings above Roger Federer.
“I am aware that if I am fit and I can play well, I have the capacity to win important titles and achieve my goals,” Nadal said.
The Madrid result was a repeat of the final in Barcelona in which Thiem came second best against the Spaniard.
“Sometimes against the best players in the world, the best ever player on this surface, you even lose when you play well,” Thiem said.
Thiem’s reward for making the final was a two-place move to seventh.
With this win, Nadal now equals Novak Djokovic’s record of 30 Masters Series titles.