However, Grayson says he's yet to ask Newcastle about Smith's availability.
"He's a good player and forget any affinity he has with the club in the past," Grayson said. "If you get a player of Alan Smith's ability then obviously you would have to be interested. We are in the market to make us better.
"We've been linked with many players. Smith, Woodgate, Kaka, Messi! Smith is a good player, Woodgate is a good player and we want good players at this club.
"They have fantastic footballing ability, experience and know-how.
"Whether I intend to, we will have to wait and see where we go with it."