The former Oldham striker, whose existing contract was due to expire at the end of the 2014-15 season, has been locked in talks with the club for the past few weeks, with an agreement having now been reached.
Smith’s signature has added to a growing feel-good factor at Elland Road following last week’s captures of Billy Sharp and Liam Cooper.
United remain in the market for several other signings, with a deal for striker Mirco Antenucci reportedly close and Brazilian midfielder Adyran also talking with the club about a move from owner Massimo Cellino’s former side Cagliari.
On signing his new deal, Smith - who hit 13 goals last term and had been linked with Millwall earlier this summer - said: “It is a huge honour and a privilege for me to represent the football club. To extend my future here is brilliant and I’m over the moon. I’m very happy and I’m delighted that it has happened.”