The move is thought to have been instigated by Cardiff chairman Peter Ridsdale, formerly Smith's chairman at Leeds.
In his time at Leeds, Smith was sent off against Cardiff for elbowing Andy Legg in the Bluebirds' famous 2-1 FA Cup win at Ninian Park in January 2002.
Smith is in need of regular football, but since returning to fitness in August he has struggled to force his way into Ferguson's thinking.
He was substituted after 60 minutes in the shock Carling Cup defeat by Southend on Tuesday.
Ferguson added: "There is a bit of risk about sending him out.
"But in the present situation, he needs to get through competitive matches and he is still a bit short for us in that.
"But he is improving and it's only through games that he's going to get it back."