Ruud, who lost last year's Roland Garros final to Rafael Nadal, defeated sixth-ranked Rune for the fifth time in six matches and avenged his loss in the semi-finals at Rome in May.
"I kind of looked at it as though he was the favourite - he won the last time we played and he's had a better year than me so far," said Ruud.
"I was feeling like the underdog even though I was seeded number four and he was seeded number six."
Ruud fended off two break points in the opening game of the match and then consistently put pressure on Rune's serve, breaking twice in a lopsided first set.
He dominated the second in similar fashion before Rune threatened a comeback as he forced a fourth set.
But Ruud surged 4-1 ahead and eventually put Rune away on his fifth match point as there was no repeat of the bad blood from last year's quarter-final.
"Luckily for me, the first two sets, he wasn't probably feeling it too well, he made a lot of errors and I got a lot of points for free," said Ruud.
"That helped settle the nerves but he fought back and third set he came out playing better. Then in the fourth set I was lucky to get that one break and keep it all the way out."
