Separately, police said earlier this month there was evidence to charge a Netanyahu lawyer and others with bribery in a corruption probe related to Israel's purchase of German submarines.
According to a police statement, authorities found evidence of fraud, bribery, and breach of trust.
Netanyahu immediately rejected the accusations against him and his wife, claiming "these recommendations were determined and leaked even before the investigations began".
The police said they had found evidence that "Netanyahu and those close to him blatantly intervened, sometimes on a daily basis, in the content published on the Walla news website, and sought to influence the appointment of senior employees (editors and reporters), while using their ties to Shaul and [his wife] Iris Elovitch".
The case surrounds suspicions that Netanyahu's government gave regulatory favours to telecoms company Bezeq in exchange for favourable coverage of the PM.
The prime minister is also accused of trying to strike a deal with a different leading media company for better coverage in return for limitations being placed on a rival newspaper.
Some analysts say Mr Netanyahu could call a snap election because of the legal proceedings, with the next national vote not due until November 2019. Hefetz was the third confidant of the prime minister to become a witness in various cases, joining former communications ministry director general Shlomo Filber and former chief of staff Ari Harow.
In return, the couple are alleged to have been given more positive coverage on Walla! news website, owned by Bezeq.
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"I'm sure that in this case the relevant authorities, after examining the issue, will reach the same conclusion: that there was nothing because there is nothing", he said in a statement.
Police are also recommending charges be brought against Elovitch and members of his family.
They are suspected of interfering in regulatory decisions that favoured Bezeq and its majority shareholder Shaul Elovitch.
Mr Netanyahu, who has led Israel for four terms, has denied any wrongdoing.
Other opposition figures, including opposition leader Tzipi Livni, quickly joined in the call for Netanyahu to resign.
Mr Netanyahu held the government's communications portfolio until a year ago and oversaw regulation in the field.
Police are also recommending that charges be brought against Netanyahu's wife, Sara, who has been at the centre of much of the corruption allegations surrounding the longtime Israeli leader.
The prime minister has been repeatedly questioned by police in the three corruption investigations.