Schumacher announced on Thursday at Suzuka he will step down from the sport for a second time at the end of the season.
Schumacher is the most-successful driver in the sport's history with seven world titles and 91 race wins to his name.
But his comeback with Mercedes, after his initial retirement in 2006, has proved to be a failure, with the German securing only one podium finish in three seasons.
Button believes losing one of the six world champions currently on the grid will be a blow to the sport, but admits he expected Schumacher to step down after his McLaren team-mate Lewis Hamilton was confirmed as Nico Rosberg's partner at Mercedes from 2013.
When asked for his opinion on Schumacher's decision, Button said: "I have some comments from five years ago you could probably use.
"But I don't think we were too surprised, the sport is better with Michael around.
"He is a seven-time champion and he has achieved more in the sport than anyone else and more than anyone else will for a very long time.
"I am sad he isn't going to be around next year but he obviously thinks it's the right time to move on."
McLaren team principal Martin Whitmarsh may well be ruing Schumacher's indecision over his future, which led Mercedes to actively pursue Hamilton as a replacement and ultimately succeed in getting their man.
But Whitmarsh paid Schumacher a fulsome tribute, and believes his last season in F1 has been by far the strongest of his second stint in the sport.
He said: "His achievements are difficult to imagine being improved on in our lifetime so inevitably it's a loss. He's a name, a brand within the sport, his achievements have been great whatever he does.
"I personally think this year has been his strongest since he returned and with a bit more luck he could have won some races this year, but clearly it's his decision and it's a loss to the sport but I guess any great athlete has to decide when it's time to go."