Butters will become a restricted free agent after this season and will be one of the top stories in the league this year. Clubs such as the Western Bulldogs and Geelong would love to entice him back to his home state.
Hinkley had been Butters' only senior coach until Josh Carr took over at Alberton.
"He'll make a decision at the right time. All I've said about Zak, is he does love home and he loves his family," Hinkley said on Thursday at the Kayo Sports AFL season launch.
"Equally, he has the same connection to his football club. (He) and Connor (Rozee) came through together, they've been great mates, they're vice-captain and captain.
"It's going to be a really difficult decision for Zak, but we all know if you're going to chase someone and you're from Victoria, you're going to chase Zak Butters - he's a star."
After 13 seasons coaching Port, Hinkley is relishing some time out and will be a TV commentator this year.
"I've never seen him this relaxed. It's funny what the lack of having the stress of running a footy club can do to a person," fellow commentator Jason Dunstall joked at their press conference.
Amid predictions of gloom for Port this season, Hinkley is bullish about what they might achieve with plenty of young talent and a favourable draw.
"I'm still favourable to their list. I understand their list, their dynamics and the youth of that side," Hinkley said.
"Port have a favourable draw, but you still have to make that draw work.
"They have a start to the season that will give them the chance to get off to a flyer.
"If they do that, anything can happen. There's a lot of upside to Port."
Hinkley said it was too soon for him to think about if he might return to football.
"Every morning I wake up and I'm not thinking footy, which is nice for a period of time - not forever," he said.
"I don't know about that question (coaching again) as such. All I know at the moment, this has been the right decision."
Hinkley said as part of his commentary role, he had done a list assessment of each club.
That prompted Dunstall, the Hawthorn great, to ask: "will the Hawks be OK?"
Hinkley replied: "clearly they're a top-four list, if they get everything right."
He also noted that GWS might have three of their best five players injured for the start of the season, presenting a major early challenge for the Giants.
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