iTunes’ default equalizer settings leave a lot to be desired. If you’re looking to improve the audio output from iTunes, you’ll have to make your own equalizer settings.
To do that, first launch iTunes and choose Window > Equalizer from the menu bar.
Next, from the pulldown menu in the Equalizer window, choose Manual.
Finally, adjust your settings as shown below.
Of course, your mileage may vary (depending upon your speakers, amplifier system, etc.) – but these settings do a pretty good job whether you’re listening to audio through your Mac’s internal speakers or if you have a small external speaker system attached. It even sounds great through my beaten-up pair of Sony MDR-7506 headphones.