By Ian Griffiths
Butler, who has signed an 18-month deal, will take over the managerial seat vacated by Mat Zan Mat Aris, after the Malaysian tactician resigned following pressure from Turtles supporters, who were displeased with their team's poor run of form.
Terengganu head into Tuesday's league clash with Sarawak occupying fourth spot in Malaysia's top-flight and with an AFC Cup last 16 clash away at Kelantan to come next week.
Having left Kelantan in somewhat contentious circumstances, Butler is clearly delighted to back in Malaysia, and - just as importantly - at a side he believes has the ability to achieve much in the near future.
"I love a challenge and I am here for the long-term," Butler told ESPNSTAR.com.
"Terengganu are a very talented young team who are, I believe, one of Malaysia's top three sides, but one that has yet to realise its full potential.
"I definitely think the club can kick-on and achieve even greater success within the next two to three years. It is an extremely talented group," the former West Ham United midfielder added.
Although Butler will not be on the Terengganu bench for the Sarawak game, the 45-year-old is set to be on the sidelines for the vital AFC Cup last 16 tie away at former employers Kelantan on May 23.
Having seen his new charges lose 2-1 to Felda United at the weekend, Butler is eager for his side to build a much needed head of steam against Sarawak as they prepare for the continental showdown in Kota Bharu.
"The team is a little low on confidence after the lost to Felda, but we need to build up some momentum (against Sarawak) that we can take into the game against Kelantan," the one-time Singapore Armed Forces coach declared.
"The AFC Cup game is a one-off, but it promises to be fantastic and a match that I am already relishing the prospect of."
The move to Terengganu comes after Butler parted company with Indonesia Super League side Persiba Balikpapan after just two months in charge, and marks his third foray into Malaysian football, after two previous spells with Kelantan.