Jodar, who's rapidly making a name for himself as Spain's 'new Rafa' following in the great footsteps of Rafa Nala, rallied to wear down his experienced Norwegian opponent, earning a 4-6 6-4 6-3 win.
It will earn him a crack at Daniil Medvedev in the semis after the Russian defeated American Tommy Paul 6-3 1-6 6-3.
It was the fourth-straight match at the ATP Masters 1000 event in which Jodar had mounted a successful comeback after losing the first set.
"Casper, I think, played the important points in the first set better than me," admitted the youngster.
"I couldn't win the break points because of his serve, so I knew I wanted to come back again. It was very tough, so I had to give my best level today to win this match."
Jodar eventually powered to victory in two hours 20 minutes by breaking Ruud's serve five times in the second and third sets.
The latest milestone in Jodar's breakthrough season also strengthened his chances of qualifying for the ATP Finals in his first full year on the tour.
Medvedev, a former Shanghai Masters champion, had looked in trouble in the other semi when losing the second set but he recovered to claim victory in another hard-fought contest that lasted two hours nine minutes.
"I think today I was a tiny bit off from time to time but the third set was great," Medvedev said after firing down 16 aces and hitting 31 winners.
"I managed to regroup myself and serve better in the third and get the win, which is a great feeling."
Medvedev and Jodar, who've never played each other before, will be seeking to earn a final spot against either top seed Alexander Zverev, conqueror of Alex de Minaur in the quarter-final, or Spaniard Alejandro Davidovich Fokina.
"He has a great game," Medvedev said of Jodar. "He hits very strong, so it is going to be fun to see it in real life, to get the feel.
"But if I am playing well, I am tough to beat and that is what I am going to try to do."
Medvedev won his third title of the season in Hangzhou last month and is the only former Shanghai champion remaining in the draw, having lifted the trophy in 2019.
