You will have to go through passport control in MAD to enter the Schengen zone. You will also go through another security check at T4.

There might be a call for connecting passengers to remain on board so that they can be bussed directly over to T4.

Don't forget that arrival times are padded by at least 20-30 minutes so that airlines can claim a better "on-time" record. If you are on the same ticket you are protected anyhow and could be compensated for the missed connection under EU rules. Just know ahead of time what other flights go to VCE that day.

But if Iberia are selling tickets, it is because the connection can be made.