Butt told the Evening Chronicle: "It wasn't good to have that on your CV. It's not great.
"I was on loan, and it wasn't going well for me. It wasn't good for me, but I've had plenty of low points."
However, Butt has revealed he was reluctant to leave Newcastle in the first place.
He said: "It was weird, because if truth be told I never really wanted to leave Newcastle.
" But, at the time, I wasn't going to be playing, and I've always been told to go and play as much football as I can.
"At the time I spoke to the manager, Graeme (Souness), and he was honest to me and said 'I can't guarantee you'll be playing all the time'. That's why I went.
"It was tough there (at Birmingham), but it's history now, and I've got to look after this club and try and not repeat what happened there.
"Hopefully we can keep this club up, and move on from there."