The Iron will have to replace the standing area of Glanford Park with seats to play Championship football beyond this season, as current legislation says terracing can only be used for three seasons in the top two divisions of English football.
There are two possibilities for redevelopment being considered by the club - the first being simply installing seats in the current area, reducing capacity by more than 1,000, the second being extending the stand to include a three-tiered building where the Iron Bar is.
The club are also backing a supporter-led campaign to keep the terrace, called Keep Scunthorpe Standing.
A petition has more than 2,000 signatures and the campaign is being assisted by the Football Supporters Federation.
Botham, who played in front of standing supporters at the Old Showground in the 1980s but made his name as an England cricketer, described terracing as a key part of the football experience.
"Terracing is how I remember Bovril, standing there on a cold winter evening - especially in February, the wind whipping off that North Sea - a little bit of Bovril on the terraces is what football is all about," he said.