The Bulls announced the move on Thursday. He had been waived earlier in the week by the Los Angeles Clippers.
The 31-year-old Butler appeared in 41 games with the Clippers, averaging 5.0 points in 18.1 minutes per game. In eight-plus seasons, he has averaged 8.6 points and shot 36.1 percent on 3-pointers.
The Bulls are third in the conference at 41-18, behind Boston and Miami. Their next game is Friday at Orlando.