The deal includes a team option for the second year of the contract. Financial terms were not available. The person spoke to The Associated Press on Tuesday on condition of anonymity because the NBA does not release free agent signings until Friday.
Smith gives the Hornets a veteran backup point guard after a sign-and-trade deal that sent three-year NBA veteran Devonte Graham to the New Orleans Pelicans for a 2020 lottery-protected first round draft pick.
A 10-year NBA veteran, Smith spent last season with the Washington Wizards where he averaged 6.7 points and 3.4 assists per game. He shot 36.7 per cent from 3-point range in 44 games.
Smith is expected to back up LaMelo Ball and Terry Rozier.
Along with the Graham trade, the Hornets have lost centre Cody Zeller and Malik Monk so far in free agency.