Butterfield arrives at the iPro Stadium in a deal thought to be worth around £4million and he has put pen to paper on a four-year contract.
The 25-year-old becomes the eighth new signing made by the Rams this summer and takes their spending to somewhere in the region of £13million.
“As I’ve stated publicly in the last few weeks, if we were going to add to our squad it would be a case of making a quality addition rather than bringing someone in just to make up the numbers,” Derby head coach Paul Clement told the club’s official website.
“In Jacob, we have a very talented player and an individual that is experienced at Championship level.
“He is positive addition to our already strong squad and, in light of Will Hughes injury, Sam Rush and chairman Mel Morris have worked tirelessly to get this deal over the line.”
Butterfield began his professional career at Barnsley, making 100 senior appearances for the Tykes and scoring eight goals.
A move to Norwich followed in the summer of 2012 but he played only three times for the Canaries, while having loan spells at Bolton and Crystal Palace.
He joined Middlesbrough two years ago and went on to make 32 appearances for the club, scoring three goals.
Last summer, Butterfield signed for Huddersfield as part of the deal that saw Adam Clayton move in the opposite direction. He scored seven goals in 52 appearances during his time in West Yorkshire.