Born in Colombo (in what is now Sri Lanka) to English parents, Butler moved back to Britain as a child. He played for Dartford and Fulham Thursday as a youth, before signing for Fulham in 1913 and moving to Arsenal in 1914. He played in the Gunners' reserve side in his first season, before World War I intervened. Butler duly signed up for the Royal Artillery and served in France during the war, and returned to Arsenal after the end of hostilities. By then he had come of age, and with the resumption of first-class football, he soon made his first-team debut for the Gunners, against Bolton Wanderers on 15 November 1919.
A tall, elegant and clean player, Butler initially played as a traditional "centre half" — i.e. as a central, deep-lying midfielder; he was in competition with the Gunner's regular centre halves, Chris Buckley and Alex Graham, but by 1924-25, he was the undisputed first-choice centre half, playing in all but three games of the club's League campaign that season. He also won his first and only cap for England, against Belgium on 8 December 1924.
Butler continued to be a near ever-present for the next four seasons, playing in every match of the Gunners' FA Cup run in 1927, where they reached the final but lost 1–0 to Cardiff City. By now, Arsenal had taken advantage of a relaxation in the offside law and had changed formation, from the traditional 2–3–5 to the new "WM"; the centre half now played in defence with the full backs as a "stopper". Although Butler had some success in the role, Arsenal's manager Herbert Chapman thought the side could do better, and in 1929–30 replaced Butler with Herbie Roberts.