The Rams have identified Butland as a player who can cover for usual number one Lee Grant, after the stopper picked up an injury.
Grant has been ruled out for what appears a considerable amount of time with an ankle problem, meaning Butland was a necessary signing for the Championship promotion hopefuls.
Steve McClaren's men have made an impressive start to life and Butland will need to step-up immediately if he is to meet their standards.
The club have a good defensive record and Butland will be under pressure to help keep this form up.
The 'keeper, who has one England cap to his name to date, is in need of game time as he cannot displace Asmir Begovic at Stoke City.
Despite being a talented youngster, Mark Hughes will not put him in his first-team because of Begovic's quality and, therefore, a move was important for his development.
So far this season Butland has had to get his taste of first-team football with the England U21's, so regular action should be a good thing for him.
The 21-year-old is expected to go straight into Derby's squad for their game against Blackpool on Tuesday night.