The Ibrox manager believes the veteran boss could be a safe pair of hands, at least in the short-term.
Smith left the national post to return to Ibrox in 2007, but he is currently out of football after retiring from Rangers almost 18 months ago. And, if he is willing to step back into the game, McCoist believes he would be the ideal replacement for Levein.
Former Celtic boss Gordon Strachan is the favourite for the job and McCoist has not ruled out the duo working together in some capacity.
"If you are looking for someone, the automatic choice for me to steady the ship would be Walter," said McCoist. "I am not sure if he would want to go in there long-term; maybe Gordon would want to be in there long-term. Both are very capable men.
"It looks as though Gordon is the favourite and I can totally understand that. Gordon has been a very successful player and a very successful manager.
"Alex McLeish has said he doesn't fancy it but there are other people throwing their names into the hat.
"We have one or two people who could do the job and do it well. We need a strong man in there."
Meanwhile, McCoist has revealed that he is in no rush to open up talks about extending his own contract at Ibrox, and instead wants his focus to be on guiding Rangers out of the Third Division.
"The club has always been the most important thing to everyone who went through this traumatic time," he said. "We are not out of it yet but we are heading in the right direction.
"I have a good and healthy relationship with Charles Green at the moment. We are learning about each other and it is work in progress.
"I am delighted to be where I am and I definitely think there has been a more realistic outlook now to where we are and where we want to be and that is very pleasing.
"I hope I get the opportunity to get us back to where we belong."
"I'm loving it," he added. "I'm loving going to Peterhead and going to Annan and them coming here. It is a completely different experience to what any other Rangers manager has ever had. I am enjoying it, but it is hard.
"There are not many people who will pat us on the back if we have a good result, but there are plenty who will hammer us if it's a bad one."
