Bennett has been linked with attempts to encourage several NRL players to elect for England for the Four Nations and 2017 World Cup, including Trent Hodkinson, the Morris twins, Blake Austin and Chris McQueen.
Smith served as Great Britain coach in 2007 and as boss of England for 2008 and 2009.
Under him Samoan prop Maurie Fa’asavalu played for England after serving a three-year residency period.
Smith, who became a naturalized British citizen in 2008, admitted he felt “mixed” over Bennett’s straregy.
“I was controversial at the time with Fa’asavalu, that caused some controversy,” he said.
“I don’t know if Wayne or anyone is doing anything illegal [under the eligibility rules], I was justified at my time that it was the right thing because Fa’asavalu was living in this country and was making a living in this country to represent England.
“Just like many in this country, such as Rangi Chase, who have qualified over the years.
“To get Aussies to play for England, I couldn’t have sat comfortable with that during my time.
“It’s up to each individual to be able to sleep at night based on their selection and their own justification of selection.
“I had to be able to sleep with my controversies at that stage, I’m not sure i could have gone with the Morris boys or anyone else playing for another country in our sport.
“I’ve pinned my stripes to this country ever since I stepped off the plane and I started earning English pounds as my income.
“I’ve got to say at the moment in terms of PR and getting people on side [under Bennett] it’s never been a lower time.”
It has been reported that Bennett has upset several Super clubs with his demands for England players in terms of a pre-season camp and mid-season Test next year.
Smith confirmed a lot of “noses have been point of joint”.
“In the manner of which its been done, I don’t think there’s been any favours done,” he said.
“If you went round all the coaches in super league, I can’t speak for all of them but I know a lot of them and they’ve been very patriotic and pinned their stripes to England but the way a lot of things have been done have put a lot of noses out of joint.
“It’s almost like a check ist has been put out to put peoples noses out of joint, how to do things, how not to do things, demands, requests.
“It’s really sad to have people who are really passionate about international sport in this country feel as though they are distanced from it and it’s a shame.”