Calvin Watkins of the Dallas Morning News reported Tuesday that Smith signed a deal with Dallas.
Dallas has played its past four games without Leighton Vander Esch, who has been nursing a neck injury. He also sat out the team's Week 9 win over the New York Giants with the same issue.
Per CBS Sports' Patrik Walker, the Cowboys are "not optimistic" their star linebacker will return this season.
Head coach Jason Garrett previously told reporters the Cowboys don't believe Vander Esch's injury is career-ending and "we think at some point he will be back."
In addition to Vander Esch's absence, Dallas announced Monday that first-year linebacker Luke Gifford will miss six to eight weeks with a fractured arm suffered in the team's 44-21 win over the Los Angeles Rams.
Smith appeared in two games this season with the Jacksonville Jaguars before being released on Nov. 5. The 30-year-old has also played for the Seattle Seahawks, Oakland Raiders and San Francisco 49ers in his eight-year career.
A seventh-round draft pick by Seattle in 2011, Smith was named MVP of the team's Super Bowl victory over the Denver Broncos when he recorded 10 combined tackles and returned an interception 69 yards for a touchdown.