Budinger sustained the injury in the fourth quarter of the Timberwolves' loss at Chicago Saturday and is to have surgery this week.
No timetable was given for his return, but such injuries usually require about two months to heal.
The small forward averaged 11.8 points and 3.5 rebounds in six games this season.
Budinger joins Timberwolves stars Kevin Love (broken hand) and Ricky Rubio (knee) on the injured list.
Notable deaths of 2014 [PHOTOS]