The Red Sox made the announcement on Tuesday.
He is the second former Toronto coach coming to Boston. The team previously announced that Torey Lovullo would be the bench coach after serving as first-base coach under Farrell.
Butterfield, 54, has coached for 16 years in the majors as part of his 34 years of pro baseball experience as a player, coach and minor-league manager. He was with Toronto for the past 11 years, serving as bench coach in 2008 and 2009.
He also coached for Buck Showalter with the New York Yankees from 1994-95 and the Arizona Diamondbacks from 1998-2000.