Butler was placed on the transfer list by Walsall in the summer after talks for a new deal stalled but rejected a move to Peterborough in August. He now joins Grimsby on loan and is expected to make the deal permanent in January keeping him at Blundell Park until 2009.
The former Reading man played 97 times for the Millers scoring 28 league goals and joins fellow ex Millers Gary Montgomery and Phil Barnes on the east coast.