With his Ibrox contract set to expire in January, the 61-year-old was quickly installed as one of the bookmaker's favourites when Burley was sacked earlier this week.
The veteran boss may have no interest in a return to the national team helm but believes Scotland is still a nation with potential and the job is not the poisoned chalice some believe it to be.
"It is still an attractive job," said Smith.
"People were saying the same things the last time and we got a group of players together and, in my own mind, they acquitted themselves well.
"I don't think there has been that huge a change to the group of players since then.
"I don't really see that as a major problem.
"I still think Scotland have got a decent level of player to acquit themselves well.
"You look at the likes of Northern Ireland and the Republic, who have been doing well, and I think Scotland can reach that level."
Some former managers and players have claimed Burley's desire to play attractive, expansive football ultimately proved to be his downfall.
Smith, himself, has favoured a more defensive approach with both club and country in the past but refused to be drawn on what went wrong for Burley.
"It's not for me to go into all the different aspects of what Scotland's problems are," he said.
"The problem at the moment is that they don't have a manager and they are looking for one and other people have to come up with the answers to that.
"Hopefully whoever is selected will make a good job. Whoever is going to take over, I wish him the best of luck."
He also declined to comment on whether the Scottish Football Association should restrict themselves to a Scotsman or cast their net wider in search of their new national team boss.
Smith said: "Why should I be involved in the selection of a Scotland manager?
"The people who are in a position to choose the Scotland manager can work out whether they want to go abroad or stay within Scotland.
"It's up to them. It's nothing to do with me."
There may still be some uncertainty over Smith's future at Rangers but Ibrox full-back Steven Whittaker welcomed the news he has no plans to quit for a return to Scotland.
He said: "The manager has played a big part in the success since he came back to the club and the players are delighted it looks like he is going to stay on.
"His name was always going to be put forward after the job he did before the success he has had here.
"The players would just have had to deal with whatever decision he made.
"It's important for the club. We are doing okay at the moment and have had success in previous seasons under him.
"We are looking to be successful again this season and it's great to have him as manager."
Craig Levein also emerged as one of the front-runners in the wake of Burley's departure and Whittaker says he would welcome the appointment of the Dundee United boss.
"I've seen in the papers that his name has been touted about and he has done a great job no matter what team he has been at," said Whittaker, who was capped four times under Burley.
"It's up to the SFA who they pick and it's about getting behind whoever is going to be in the job and looking forward, rather than looking back."
Meanwhile, Sir Alex Ferguson admits he has no idea who the SFA will opt for.
"I couldn't tell you," he said.
"I don't know what the thoughts are up there. They are going through a difficult period.
"They have not got the greatest Scotland squad of all time. Hopefully they can do better."
Next Permanent Scotland manager Win Special: Collins J 5/1