The Spanish champions took the lead through Mohammed Sissoko before Rafete doubled their lead after a poor Matthew Kilgallon backpass.
Leeds-born midfielder Simon Walton, 16, was making his first senior start and pulled one back from the penalty spot.
He was then sent off for two rash tackles. He was given a standing ovation by the 19,565 fans, and this was the only black spot during an encouraging second half performance by Leeds. Matthew Spring equalised with a long range free-kick.
Kevin Blackwell was impressed by Walton's display and stressed he would not be trying to change the teenager, who is only two weeks into his Academy training.
He said: "You want to see someone with a bit of devil. He wants to do well and is not afraid to put himself on the line as he showed when he demanded to take the penalty.
"I thought the tackle he was sent off for wasn't that bad, it was just youthful exuberance. I won't be changing him, we try to change players too quickly in this country.
"I don't want to put too much pressure on him. If I can get 10 to 15 games out of him this season it will be a bonus. He has shown that he is capable of handling it physically and mentally.
"He has shown he has the willingness to work and if he keeps developing he could one day become as big an icon as Alan Smith or David Batty.''
Ranieri admitted that Leeds always make life difficult for him at Elland Road but was not unhappy with his own side's performance. He said: "I thought we played very well in the first half and not so good in the second but I made a lot of changes."It was a very different Leeds side from the one that played Valencia in the Champions League semi-final just three years ago. Only Gary Kelly was left of the Leeds team that went down 3-0 in the Mestalla Stadium and he was on the bench that night. It was deja-vu however for Ranieri, his last game as Chelsea boss was against Leeds on the day that Kevin Blackwell was in charge for the first time as caretaker boss. Valencia should have gone ahead midway through the first half when Angulo rounded Scott Carson but he was forced wide by Kilgallon and shot tamely into the side netting. They finally took the lead from a Leeds attack. Walton drove a half-cleared corner into Missa's body and within seconds Valencia broke to the other end where Sissoko slotted home. Within a minute the Spaniards were 2-0 up, Rafete taking advantage of a poor backpass by Kilgallon that left Carson completely exposed. Ranieri made six changes at the start of the second half and Leeds started to look much more convincing, with Julian Joachim troubling the Valencia defence with some penetrating runs. He had a fierce shot parried by substitute keeper Butelle but Joachim was brought down going for the rebound and Walton calmly fired home the penalty. Leeds drew level in the 69th minute when Spring's long range free-kick fooled Butelle and crept in for a soft goal. Walton's sending off led to a much more aggressive final 20 minutes with Leeds' Polish trialist Tomas Rzasa also finding his way into the book for a bad tackle. Valencia came closest to grabbing a winner with late pressure but Leeds fans' went home happy with their side's efforts.
Leeds United: Carson; Kelly, Duberry, Butler, Kilgallon; Richardson, Spring, Walton, Pugh; Joachim, Deane.
Substitutes (used): Rzasa, Radebe, Carlisle, Guppy, Hignett, McMaster, Johnson.
Valencia: Palop; Torres, Navarro, Pellegrino, Carboni; Rufete, Sissoko, Xisco, de los Santos, Angulo, Mista.
Substitutes: Garrido, Butelle, Lopez, Parri, Redondo, Salva, Moretta, Canobbia.