The former Light Blues boss has been appointed as a non-executive director of the club, with Glasgow businessman Ian Hart also taking up a place on the Gers board.
Smith launched a bid to buy the club from Charles Green's consortium this summer but has now joined the Rangers revolution. He said: "It is a great privilege to serve the club that means so much to me in the capacity of non-executive director.Serious constructive efforts are being made to rebuild Rangers after a very difficult period in the club's history and if I can play a part helping that process, I am willing to do so.
"Apart from being a former manager of the club, I am first and foremost a supporter and am no different from the thousands of other fans who have shown they're willing to do what they can to ensure Rangers rises again.
"I must make it clear, however, that I will not be playing any role in the day-to-day running of the club or the team.
"It's the manager's job to run the team and the chief executive's job to run the club's affairs.
"The role I will fulfil is to bring my experience of Rangers and football in general to the board table.
"The people who purchased the club have shown over the last few months they are serious in their intentions to rebuild Rangers and I am happy, as many other fans have done, to lend my support."
The return of Smith is a huge coup for chief executive Green as he continues to win over any doubters amongst the Light Blue legions.
Smith joins Green, Hart, chairman Malcolm Murray and finance director Brian Stockbridge at the Ibrox top table and the Yorkshireman said: "As head of the executive team at the club, it is extremely important to have a board that has the respect of investors and Rangers supporters.
"The consortium I led to buy the club are not Rangers people, but there could be none better than Walter and Ian to fill that void."
Smith's appointment will be a huge boost to everyone at Ibrox as the Gers attempt to haul themselves back to the top of the Scottish game.
He will have no input in football matters and McCoist is pleased to see his mentor and Hart pledge their allegiance to the new regime.
He said: "Walter brings tremendous experience, he has done it all and is a Rangers man through and through. His presence will be a huge benefit to the club."