Butcher was sent from the technical area during a League Cup match between his former club Inverness Caledonian Thistle and Dundee in October following a touchline altercation.
The Scottish Football Association (SFA) ruled that the former England defender, who moved to the Edinburgh club in November, will be in the stands for the Premiership clash with St Johnstone this weekend and a further one-match suspended ban will stay in place until the end of the season.
The 54-year-old pleaded guilty to a misconduct charge in November but appealed against his suspension and fine.
The SFA decided not to impose a fine on Butcher, but upheld his ban and he will miss a second match if he is found to have breached Rule 203.
The rule states: "Misconduct at a match by failing to behave in a responsible manner as an occupant of the technical area by acting in an aggressive manner towards players of the opposing team".
