The 32-year-old signs after impressing on trial and reunites with his former Barnsley boss Keith Hill to become our sixth signing of the summer.
Butterfield came through the renowned Manchester United youth academy before joining Barnsley and making over 100 appearances for the Oakwell side.
Permanent spells at Norwich City, Middlesbrough, Huddersfield Town, Derby County and Luton Town followed, with the player having vast experience at Championship level.
Butterfield, who has most recently been at Melbourne Victory in Australia and St Johnstone in Scotland, has also enjoyed loan stints at Bolton Wanderers, Crystal Palace, Sheffield Wednesday and Bradford City in his career to date.
He has made around 400 career appearances, scoring on 33 occasions.
The signing is subject to league and FA ratification.