San Francisco plays at Indianapolis Sunday.
"We wanted to make the decision based on who I feel gives us the best chance to win," Singletary said.
In the 49ers last game, Sunday against Houston, Hill started but was replaced by Smith in the second half. Smith threw three touchdown passes, bringing the 49ers back from a 21-point deficit before they lost 24-21.
Hill led the team to three wins but lost his job after back-to-back losses, with a passer rating of 79.6.
"He's done a great job at this point, but right now, we need to go with Alex," Singletary said " Alex Smith gives us the best chance to win."