The former world number one claimed his first ATP title since 2017 last month in Antwerp to raise hopes that he could return to the top of the game despite needing career-saving hip surgery earlier this year.
Murray, who inspired Britain to the 2015 Davis Cup title, will line up alongside his older brother Jamie, Dan Evans, Kyle Edmund and Neal Skupski at the Caja Magica.
"Andy feels great," said Smith. "He's obviously extremely happy to be back in tennis.
"He's training unbelievably hard to get back to his best position, with great focus.
"If he's picked to play, then I know he will do a great job on the court. That's not ego, that's confidence of course.
"He's still a very good tennis player, he's pushing (the other) guys ahead. And at the same time, you realise what he's gone through."
Britain, who were handed a wildcard for the first tournament since the old World Group was scrapped, will be favourites to progress from a Group E which also features Kazakhstan and the Netherlands.
Andy Murray to make Grand Slam return at Australian Open
The teams will face off in two best-of-three-set singles matches in each tie, with one doubles rubber.
"We are very lucky to have three very good singles players and really good doubles options," added Smith, who is expected to choose either British number one Evans or Edmund to partner Murray, now ranked 125th.
"So I've got a few things to ponder in the next couple of days, but it's a good situation to be in.
"It wasn't that long ago that it wasn't like this and the guys all stepped up even though they were ranked 270, 300, 400... Beating guys 30th, 60th in the world.
"That's why you have to respect any opposition."
Russia get the finals, revamped by Barcelona footballer Gerard Pique's Kosmos company, underway on Monday against reigning champions Croatia.
But the Russians have been weakened by the withdrawal of world number four Daniil Medvedev, who has been struggling with exhaustion after a gruelling season that saw him reach six consecutive finals.
Croatia are missing the injured Marin Cilic, while the tournament will have to launch its new format without Roger Federer, who decided not to play.
Murray overcomes Coppejans in Antwerp opener
Novak Djokovic and home favourite Rafael Nadal have committed themselves to the event, although the Spaniard has been struggling with an abdominal injury in recent weeks.
But his captain Sergi Bruguera insisted the 19-time Grand Slam champion wants to take part.
"The truth is that he's in a great moment," said Bruguera. "He is doing well and is eager to compete."
The other ties on Monday see Belgium take on Colombia, who never played in the World Group, while Italy face Canada.
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