Bennett was part of the 1970s folk music scene in Canada, alongside figures such as Bruce Cockburn, Stan Rogers and David Wiffen. His early albums were produced by David Essig; the recording engineer for his 1977 album Hobo's Taunt was Daniel Lanois.
While commonly regarded as a major talent, Bennett did not become as famous as his contemporaries until 1996, when Stephen Fearing, Colin Linden and Tom Wilson formed Blackie and the Rodeo Kings, a supergroup named for Bennett's 1978 album, to record a tribute album of Bennett's songs. Bennett's first subsequent album of new material, Heartstrings, won a 1999 Juno Award for Best Roots & Traditional Album - Solo.
Bennett performed frequently with singer-songwriter Fred Eaglesmith, playing mandolin and harmonica.