Scholes, who originally retired at the end of last season, made a return last month to help out an injury-stricken United during their FA Cup encounter against Manchester City.
Butt believes the 37-year-old, who made five further appearances for the team, will continue to play for the Red Devils beyond the end of the season.
"If he thinks it is time to finish again that's what he will do," Butt told the Manchester Evening News.
"If he believes he can go on then he will.
"The way he is playing at the moment then surely he must be thinking he can play on beyond the end of the season.
"Of course you never know what is around the corner. He might pick up an injury or he might lose form but the way he is playing at the moment he has to be considering carrying on. I spoke to him earlier this week and I asked him outright was he going to continue and he just said he didn't know!"
Scholes has made 446 appearances in his previous debut, with 102 goals under his name.