Terms were not disclosed.
Smith spent the 2002 season with the Carolina Panthers, where he started 11 games and ran for 737 yards. He was in training camp this season with the Green Bay Packers and was cut after being injured.
The Saints have been searching for a backup to replace Ki-Jana Carter, who is scheduled to undergo surgery to repair a fracture and ligament damage to his left toe.
Smith is not expected to be active for Sunday's game against Washington Redskins. James Fenderson is expected to back up McAllister.
Smith, who turns 33 on Saturday, started 11 games for the Saints in 1998 and '99 under coach Mike Ditka. He had his best season with Miami in 2000 when he ran for 1,139 yards and 14 touchdowns.