Smith believes the summer moves will make Sunderland a Barclays Premier League force this season.
"I think it's all very exciting," the former striker, who made 145 appearances for Sunderland between 1992 and 1999, told safc.com.
"We were linked with plenty of players throughout the summer and to finally get the signings over the line was great.
"Who knows what can happen with a good season?
"The summer signings show that the club is moving in the right direction, as does Stephane Sessegnon signing a new contract.
"Players committing their futures to the club shows we are moving the right way. They will help to attract other players to come here, too."