The former Manchester United midfielder, 35, is available on a free transfer and Preston's manager is keen to see him provide the necessary experience in midfield as he overhauls his squad.
The 35-year-old Butt has been at Newcastle since a £2.5million move in 2004, but is now out of contract. Magpies boss Chris Hughton had suggested Butt could retire.
Family man: Butt is set to link up with the son of former boss Sir Alex Ferguson
Newcastle captain Nicky Butt set to finish his career on a high noteNewcastle 2 Ipswich 2: Roy Keane offers Butt new role with Tractor Boys Frustrated Aston Villa striker Marlon Harewood weighs up DC United and Bursaspor movesNewcastle ready to make £3.5m bid for Manchester City misfit Nedum Onuoha