As you said his application was referred to General Immigration and was granted stamp 4. In the same letter department would have told you what would be the story for next year renewal... Please have a look on the letter and let me know what did they said ?
In most cases once the general immigration grant you permission they will also mention if your circumstances do not change than you don't have to contact this office and just go to your local immigration officer for further extension.
Yes, he is eligible for Naturalization if he is living in Ireland for 5 years continuous residence. I would encourage you that he should apply for his naturalization and close the visa chapter ASAP.
Here is the naturalization calculator, if you enter the dates of his GNIB card renewals since he arrived in Ireland, it will show you whether he can be eligible or not.
Link to the calculator:
http://www.inis.gov.ie/en/INIS/Pages/Na ... Calculator
If you have any question do let me know.