Mario Gotze scored a spectacular extra-time winner at the Maracana on Sunday as Germany emerged victorious at the World Cup for the fourth time, and the first time since becoming a unified country.
And Butcher, who played for England in the World Cups of 1982, 1986 and 1990, thinks Germany were the top team in Brazil, despite the narrow margin of their win in the final.
Asked on a 'Monday View: World Cup Special' if Germany were worthy winners, Butcher said: "Yes, without a doubt.
"I think they were the best team in the tournament. They were the best organized and Joachim Low's substitutions really worked.
"He has got a good depth of squad to pick from and, overall, their squad was the best."
Another former England defender Andy Hinchcliffe added: "This success has been built on the back of the young players they have brought through over the last six to eight years. It is all about planning and development.
"The team spirit was clear, the players are technically gifted but they play as a team. That has been built by having these players together for six to eight years."
However, former England forward Alan Smith pointed out that Germany's recipe for success is not the only way to win big tournaments.
"You don't have to follow that template in order to win the World Cup," said the former Arsenal man.
"Argentina were so close to doing it with a player, in Lionel Messi, who dragged them right through.
"We might have been talking this morning about Argentina, and how they managed to do it, if Higuain had taken that chance (early in the game), or if Messi had taken his, shortly into the second-half.
"It is fine margins but, from Germany’s point of view, it is that squad ethic. They are all in it together and they all work together."
While Germany celebrate, England are reflecting on a first-round exit, having failed to win any of their three Group matches.
And Butcher said: "It comes down to confidence for me. The Spanish, the Germans, the Italians, the French - they have a confidence in their system, in the way they play, and in each other.
"They are good tournament teams, whereas England are not."