"I got a tip-off a deal last week had stalled, so I moved in quickly ahead of three or four clubs to sign him," boss Andy Sinton told BBC Radio Shropshire.
The loan was completed just in time for Smith to come on as a substitute in Telford's 2-0 win at Stafford.
"He's a good player who got 21 goals from a wide area for a mid-table side, and I took a close look at him in the summer," said Sinton.
Smith only managed six Blue Square Bet Premier starts for Forest Green before going on loan to Gloucester, where he scored five goals in seven games.
Source: BBC Sport
Source: BBC Sport