Madrid were paired with Bundesliga leaders Bayern in Friday's draw, meaning a return to the Santiago Bernabeu for Carlo Ancelotti, the man who led the Spanish giants to La Decima - their 10th European Cup/Champions League triumph - in 2014.
Bayern hammered Arsenal 10-2 on aggregate in the round of 16 and will pose a strong challenge for Zinedine Zidane's men.
Butragueno, Madrid's director of institutional relations, said: "Bayern were one of the hardest opponents that we could have drawn, although I'm sure they're saying the same thing. The two sides know each other very well.
"Ancelotti is their coach and he knows us very well. They've got top players all over the park and they have a lot of experience.
"We'd have liked to have faced them further on in the competition but that's the draw."
Madrid do, at least, have the small advantage of playing the second leg at home but former Madrid and Spain striker Butragueno is wary of the damage Bayern can do at the Allianz Arena.
He added: "The second leg at home gives you a small advantage, but we need to play well in Germany.
"We know that 20 good minutes in Germany can be deadly. It's not the best draw we could've got, but we have great players with experience. It'll be a great tie to play in."