The 24-year-old Smith, a former first-round draft pick, played in 34 games for the Red Wings in 2012-13. In 48 career games, he has a goal and 14 assists, along with 49 penalty minutes.
Smith also appeared in all 14 post-season games for Detroit this season, scoring two goals with three assists.
Smith spent parts of the last three seasons with the Grand Rapids Griffins of the American Hockey League. In 152 career AHL games, he has 27 goals and 59 assists.
The Red Wings announced the deal on Tuesday.