The man, identified as meat trader Jan Fasen, was arrested at the request of French authorities after a court there sentenced him in his absence to two years jail in April.
Fasen was one of four convicted for having deceived a French company when it sold it 500 tonnes of horsemeat presenting it as beef, which is more expensive.
The company sold frozen meals to 28 different companies in 13 European countries.
The revelation of the fraud in 2013 forced supermarkets across Europe to pull millions of suspect food products such as frozen lasagne and meatballs from their shelves.
Officers arrested Fasen in Spain's eastern seaside resort of Calpe near Benidorm on July 23rd.
Detenido de nuevo el gran traficante de la carne ilegal de caballo, que vivía a todo tren en Calpe https://t.co/ypk5F6OrDs
— Juan Vidal (@juvini100) July 31, 2019
The Madrid-based National Court must now decide whether to allow his extradition to France.
Spanish authorities are already investigating Fasen in a similar affair, uncovered in Spain in 2017, where he allegedly led a gang that sold horsemeat unfit for human consumption across Europe.
He was earlier arrested as part of that case and released on bail pending a trial, the Civil Guard said.
Altogether, 65 people were detained as part of that investigation, including abattoir owners, vets and farmers.
Fasen also has convictions for a similar fraud in 2012 in the Netherlands.