He's most likely referencing the real-life mobster Tommy "The Butcher" Pitera. Tommy was a pretty savage associate of the Gambino and Bonnano crime families who enjoyed dismembering his victims.
There was no known character in the Soprano's universe that was ever introduced as "The Butcher", but the Sopranos show was loosely based on a real life crime family so it makes sense they would reference other real life mobsters..