McLaren proved unable to set the pace at Monaco and Valencia, but Button is confident that the car has taken a big step forward since then.
"The car has been working great," said Button. "This is obviously a very different circuit to the last few races with a lot more downforce, but the car worked well in Hungary and at Hockenheim on higher-downforce circuits.
"Monaco wasn't our greatest day, but we have improved the car a lot since then and there's no reason why we won't be competitive again here.
"We'll be disappointed if we're not. We've been competitive in qualifying and the race over the last few races and that's been key to winning grands prix."
The 32-year-old believes that team-mate Lewis Hamilton's victory in Hungary proves that the major update introduced at July's German Grand Prix has made the car competitive on a wide range of circuits.
"Since the update that we had on the car for Hockenheim, we've had a second and three wins so that proves it was a good update.
"We've just been tweaking it since then. We are understanding the car more than we did at the start of the year.
"We still don't fully understand the tyres and the inconsistency is still there, but the feeling of the car is very good."
Button added that the one question mark going into the weekend was the performance of the car over the kerbs.
But he believes that the performance of the car in the slow speeds at the Hungaroring, combined with the way the car handled the kerbs at Monza two weeks ago, bodes well.
"In Hungary, with Lewis's win the car is working well on a slow-speed circuit with slow speed corners," said Button.
"We've just got to hope that it works over the kerb. Something we were impressed with in Monza was kerb-riding and that's important for this circuit."