The 40-year-old insists he is looking forward to being reinstated following the club's investigation.
The former Northern Ireland international said in a statement: "While passions can run high in football, especially after a poor performance, I categorically deny any allegation of wrong-doing following Monday's fixture. I understand that the club has initiated an internal investigation, with which I will cooperate fully.
"This is an unfortunate situation and I look forward to resuming my responsibilities shortly."
A club statement earlier on Wednesday said: "The club can confirm that manager Jim Magilton has been suspended with immediate effect, pending an internal investigation.
"The suspension relates to an incident which occurred at Monday's Championship fixture against Watford at Vicarage Road.
"The club will be making no further comment at this stage."
Rangers have appointed youth team managers Steve Gallen and Marc Bircham as joint caretaker managers in the interim.
They said in a statement: "The club can confirm that youth team managerial duo Steve Gallen and Marc Bircham have been placed in temporary charge following the news that manager Jim Magilton has been suspended.
"The pair will be in charge of the Rs' Championship fixture against West Bromwich Albion on Monday night.
"A further announcement regarding the futures of John Gorman and Keith Ryan will be made in due course."
Magilton is the second manager this week to be embroiled in a high-profile clash with a player, following Stoke manager Tony Pulis' alleged head butt on James Beattie after the defeat to Arsenal at the weekend.
Ulsterman Magilton allegedly reacted furiously to Buszaky's response when he asked whether he thought he was being bullied.
Patrick Agyemang then reportedly stepped in to intervene, condemning Magilton for the unprovoked attack, while Buszaky stormed out the dressing room.
The former Plymouth playmaker has since reportedly threatened to press charges over the incident and his representative was reported to have met Rangers chairman Gianni Paladini on Tuesday.
Magilton's future at Loftus Road is now in jeopardy following his suspension, pending a full internal investigation.
The 40-year-old, who penned a two-year deal at Rangers in June, has seen his team win just one of their last seven matches and concede eight goals in their last two games.
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