Raul, signed by Magath before the start of last season, opened the scoring in the 10th minute. Klaas Jan Huntelaar helped himself to two goals and missed a penalty and Joel Matip scored the other.
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"I didn't know it was my 400th goal but I'm happy, it's nice to reach this milestone," Raul told Sky. "The best thing was that we won today."
The 34-year-old Spaniard scored 323 goals for Real Madrid and 44 for Spain before adding another 33 in only 18 months at Schalke.
Magath was making his second return to Schalke since his departure last March, the previous having ended in a 1-0 defeat.
He is in his second stint with Wolfsburg, who he led to the 2008/09 Bundesliga title.
Christian Pander set up two goals and scored to help seventh-placed Hannover beat ninth-placed VfB Stuttgart 4-2 in the later game.
Pander's pin-point corners allowed Karim Haggui and Mame Diouf to score with first-half headers before he got on the score sheet himself with a 20-metre rocket straight after the restart.
Lars Stindl made it 4-0 before Stuttgart staged a late fightback as Martin Harnik and Shinji Okazaki each grabbed goals.
Schalke, fourth in the table with 44 points from 22 games, moved within one point of third-placed Bayern Munich who were held by Freiburg on Saturday.
Borussia Dortmund lead with 49 points, followed by Borussia Monchengladbach on 46.
Wolfsburg have the worst away record in the Bundesliga, having taken four points from 11 outings, and were quickly in trouble as they fell 2-0 behind in 15 minutes.
Jefferson Farfan's corner was headed on at the near post by Matip and Raul, left unmarked at the far post, turned the ball in.
Five minutes later, Schalke broke down the left and Christian Fuchs sent over an inviting low cross which Huntelaar side-footed past Diego Benaglio.
Wolfsburg could have pulled one back when Yohandry Orozco was sent clear but his shot was blocked by Lars Unnerstall, then Mario Mandzukic fired wildly over.
Huntelaar was twice denied by Benaglio before half-time, the first from a penalty which he hit at the centre of the goal and was comfortably saved by the Swiss goalkeeper.
But the hosts increased their lead four minutes after the break when Matip scored with a cheeky back-heel following a corner.
Huntelaar completed the scoring in the 72nd minute, the Dutchman heading his 18th league goal of the season after Fuchs crossed from the left at the second attempt.
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