The Glasgow giants and the Dutch Eredivisie leaders clash tonight at Philips Stadion in the Europa League Round of 16 first leg and Smith is expecting a step up in class for his men after getting past Sporting Lisbon in the last phase.
“They look as though they are having a season where they are more than capable of winning the championship," he said.
"I think PSV are in a better place than Sporting Lisbon at the present moment, you know, with Sporting Lisbon, a little bit like ourselves, embroiled in one or two off-field problems.
"They look as though they're having a really good season, they've got themselves top of the league, they're going very well.
"So, therefore, I'd say we've probably got a much tougher task in this round.”
Smith could be boosted by the return of striker Kyle Lafferty and winger Vladimir Weiss for tonight’s meeting which kicks off at 6:00pm GMT.