Butt gave the lavish praise to the current Ipswich Town and ex-United first team coach during an interview on talkSPORT.
Butt spoke about how McKenna pushed up Ipswich to two straight promotions and is now helping them hold their own in the Premier League.
He explained: "I am telling you now, Kieran McKenna is one of the best coaches I've ever seen on the grass, ever.
"I'll put him next to anybody I've seen, and that's including Carlos Quiroz, all the great coaches that I've worked with, Steve McClaren.
"He's as good as any of them, but he's having a bad time. Why? Because he's in charge of a team that isn't one of the top teams in the Premier League.
"He's just had two promotions, so it's going to be a difficult year for them.
"If he went in at a top team like an Arsenal or somewhere, I'm pretty sure he'd be flying. And I think that's the honest answer, it's not a bitter thing."