Speaking ahead of Saturday's trip to Bolton Wanderers, the Reds boss revealed the new England defender's height was one of the reasons for his redeployment.
Sir Alex said:
"We put him at right-back due to young Rafael getting an early season injury. But when we played City in the Community Shield, we also had to consider the height of their team. We don't have a big side in terms of our midfield players and forward players so somewhere along the line we have to balance out the strength of the other teams. The Bolton game is another example of that. The height of Chris and his ability in the air is big bonus for us."
Although the United manager still regards Smalling as a central defender first and foremost, he praised the youngster's versatility and even hinted at a possible third position for the player he signed from Fulham in 2010.
"We have to be fair to him in the sense that we brought him here as a centre back," acknowledged Sir Alex. "In training sessions, he shows ability and versatility. He's played in midfield in training. He's an all-round player.
"I think his time will come as centre back but whilst he's playing so well at the moment, there's no reason to change. He's bringing good defensive stability to us and his pace has been a great bonus so we'll just carry on."