Benitez's men finished the year in fine style, recording a 3-1 win over Real Sociedad on Wednesday, though the former Liverpool boss was booed by supporters throughout.
The Spaniard has been under increasing pressure due to his team's performances, but Madrid sit just two points behind La Liga leaders Barcelona – who have a game in hand.
And when asked if he had confidence in Benitez, Butragueno told Movistar+: "Yes, absolutely."
Madrid will finish the year without a trophy, having claimed four during 2014.
And Butragueno hopes a new year will bring different luck for the La Liga giants, who kick-off 2016 with a trip to Valencia on Sunday.
"Last year we had gotten to this point with four titles. We came to win the Club World Cup.
"[This year] has been different...I hope 2016 is good, because we do well in even years."
'Real Madrid have absolute confidence in Benitez'
!['Real Madrid have absolute confidence in Benitez']()
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