Smith saw his side slump to their second defeat in 12 days to their Glasgow neighbours as headers from David Weir and Daniel Cousin were cancelled out by a Scott McDonald brace and a Barry Robson penalty.
"We know it was going to be a big challenge for but it is still in our hands.
"We know if we keep winning then we have a four-point lead so it is our job to handle the games as they come along."
Smith was also angered that Steven Whittaker was sent off for a second yellow card in stoppage time.
The Rangers boss claims that Celtic striker Jan Vennegoor of Hesselink should have been shown a straight red instead of a yellow for his thigh-high challenge on substitute Amdy Faye earlier in the contest.
Smith added: "There is always going to be a physical aspect to the game but I am a little bit aggrieved about Steven Whittaker being sent off.
"His first foul was a booking but the second one was just a tired challenge at the end of the game.
"Vennegoor of Hesselink's challenge warranted more than a yellow card.
"So when you consider the context of the game, we had a player sent off in innocuous circumstances.
"But I think the referee had a good game with the exception of that decision.
"In the end I was a little bit disappointed not to take a point from the match. I thought we were value for at least a point."