The 32-year-old was expected to miss out on the Test series against the tourists after suffering a knee injury on the eve of head coach Robbie Deans's initial squad announcement.
However, having been drafted into the squad for the second Test, Smith is now ready to be selected in Sydney coming on the back of a week's training.
"He's had a week of training under his belt, he's had some background with us and yes, he is physically fit enough to be able to be considered," said Deans.
"We've talked about what George brings previously, it's good to have him in the group. Even last week when he wasn't preparing to play, he offers good value."
The series is level at 1-1 ahead of the deciding Test in Sydney on Saturday.