The £100,000 structure replaces the tropical house originally set up by John Spencer-Churchill - 11th Duke of Marlborough which closed in October.
Hundreds of butterflies have been released into the house in the gardens of the palace. Species include blue mountain, owl and monarch butterflies.
Pupae from Malaysia, Thailand and the Philippines have been brought into its hatchery.
Hilary Wood, head of gardens at the palace said: "The work has safeguarded the building for many years to come.
"It's an amazing sight to see the house filled with exotic butterflies once again."
Winston Churchill who had a lifelong passion for butterflies was born at Blenheim Palace on 30 November, 1874.
The prime minister bred butterflies, setting up a butterfly house at his home in Chartwell, Kent which has been restored by the National Trust.
A butterfly house at Blenheim Palace has been opened to the public.