When I was little and travelling as part of a family of four we never stayed in higher end hotels. We also never had any problems finding pensiones that would accommodate all of us.

For Valencia you might like to try the Novotel
http://www.accorhotels.com/gb/hotel-...sos/room.shtml
Their rooms are for two adults and two children

Granada doesn't have the abundance of high end hotels that other cities have, but here's just one pension/hostal that can accommodate you all in one room (there will be many others):
http://www.hostalviena.com/rooms.htm
If you want a more conventional hotel then http://www.hoteljuanmiguel.com/ has family rooms also. (You can book this hotel through Expedia if you don't have any luck with the hotel's own booking engine)