Police raided the premises in Taman Bukit Minyak in northern Penang state on Sunday night, after receiving a distress call from an uncle of the girl.
Police found the girl lying face down under the human pile made up of her parents, grandmother, uncle, aunt, two cousins and their Indonesian maid, The Star newspaper reported.
The girl died of suffocation and all eight involved were detained.
The exorcism ritual is practised by Chinese and Indians as their belief in supernatural remains long entrenched. Deaths have earlier also been reported from the country from similar rituals.