The 33-year old, who was a free agent following his release from Saints this summer, has initially joined on non-contract terms.
"He knows the game inside out," manager Greg Abbott told the club's official website.
"Danny has played consistently well at a high level. He has that bit of knowledge and experience."
The addition of Butterfield, who can play at the back as well as in midfield, could allow current right-back Brad Potts to push into a more advanced role in Friday night's game against Colchester.