With the advent of Network Function Virtualization (NFV), network services that traditionally run on proprietary dedicated hardware can now be realized using Virtual Network Functions (VNFs) that are hosted on general-purpose commodity hardware. This new network paradigm offers a great flexibility to Internet service providers (ISPs) for efficiently operating their networks (collecting network statistics, enforcing management policies, etc.). However, introducing NFV requires an investment to deploy VNFs at certain network nodes (called VNF-nodes), which has to account for practical constraints such as the deployment budget and the VNF-node capacity. To that end, it is important to design a joint VNF-nodes placement and capacity allocation algorithm that can maximize the total amount of network flows that are fully processed by the VNF-nodes while respecting such practical constraints. In contrast to most prior work that often neglects either the budget constraint or the capacity constraint, we explicitly consider both of them. We prove that accounting for these constraints introduces several new challenges. Specifically, we prove that the studied problem is not only NP-hard but also non-submodular. To address these challenges, we introduce a novel relaxation method such that the objective function of the relaxed placement subproblem becomes submodular. Leveraging this useful submodular property, we propose two algorithms that achieve an approximation ratio of $\frac{1}{2}(1-1/e)$ and $\frac{1}{3}(1-1/e)$ for the original non-relaxed problem, respectively. Finally, we corroborate the effectiveness of the proposed algorithms through extensive evaluations using trace-driven simulations.