Butcher, already assistant manager of the Scottish national team, will remain in that role as he takes over at the northern club.
“There's a huge challenge here to be met," Butcher said.
“There has to be a great togetherness and effort in the remaining 15 games. I'm sure if the players do preserve their SPL status, they'll be heroes and that's what I'll be stressing to them.
“Obviously, 23 games have elapsed and the club have 17 points.
"There is a lot of ground to make up on the other teams, but Maurice (assistant Maurice Malpas) and I are very eager to get to grips with the challenge.”
The former England captain said that Scotland boss George Burley was happy for him to get back into club management.
"I spoke to George Burley and he gave me very good advice. He had no problems with it,” the 50-year old added.
"You don't get many chances in life. I've had one or two setbacks in management - in the last two jobs in particular, where I very much stepped into the unknown.
"In this instance, it's not like that - I don't know all of the players here that well, but I know the SPL and the Scottish environment. I spoke to George again and he was very enthusiastic. If George felt it wasn't right for me then he would have said. I trust him."