Butland - who played a key role in England winning the under-17 European Championship on Sunday - was made up.
Terry Westley, Blues' Academy manager, told the Birmingham Mail: "When the news came through that we had signed Ben, I spoke to Jack and he said 'I couldn't be more delighted'.
"It's another England goalkeeper in front of him, one of the best in the country.
"He will watch and learn and suck all the experience out of him, like he did when Joe was here and like he does with Maik Taylor.
"He doesn't see it as a blow, he sees it as another opportunity to improve his own game."