Smith, who will celebrate his 70th birthday this month, is among the names now being considered for the job in the aftermath of first-choice Michael O’Neill rejecting the offer two weeks ago.
It is understood Smith would give serious consideration to a return to the Scotland role he previously filled from December 2004 to January 2007. He has been out of management since ending his second spell as Rangers manager in the summer of 2011.
“I’m not surprised Walter is a candidate,” said current Ibrox boss Murty who played for Scotland’s 2006 Kirin Cup winning side under Smith.
“He has been and still is an outstanding candidate for any job that comes up and, if anything, I’m a little surprised it has taken the SFA this long to consider him.
“I’m certainly not surprised his name has been thrown in the hat and if he does take the job, he will get everyone’s backing from this football club because he is an absolute legend for Scotland and Rangers.
“If he does return, he will have thought long and hard about it and I think it will be a good move. He will get the full backing of everyone that knows him. He’s a top, top man and I cannot speak highly enough of him. In my experience of playing for him and of talking to him, his knowledge of the game is vast, very deep and I am very hopeful he would be a success for Scotland if he took it.”
Murty insists Smith’s near seven-year absence from front-line coaching should not necessarily be regarded as a negative factor in assessing his suitability for the job.
“That’s not a concern for me,” said Murty. “But I’m not making the decision, you would have to ask the guys at the SFA who are. But if they chose Walter, they would have done their due diligence and made the decision they think is best.
“The guy has got an aura about him. When you meet him walking down a corridor, he’s just got that aura.
“That comes hard won, with a lot of experience, a lot of games, a lot of knowledge. He’s also incredibly humble.
“What impressed me most about him when I played for him was his faith in you and the clarity he provided. He wouldn’t put you in a situation he didn’t think you could handle, but he would tell you everything that you needed to know to handle the situation you were facing and then trust you to get on with it.
“The feeling when you walked out on to a pitch as one of Walter’s players was great.”
The potential appointment of Smith has also been backed by former Scotland striker Billy Dodds, who feels the man who won 21 major trophies over his two stints as Rangers manager could be tempted out of retirement.
“Only Walter knows whether he wants to say ‘Yes, I am going to put myself back into the melting pot’,” said Dodds.
“It is a hard one for him. He is enjoying his own time, away with his family and he’s made all his money. He does not really need it.
“But you know, as a football person, as a football man, whether as a player or a coach, it is always there. People say ‘you are crazy going back in’ but you still go back for more.
“It probably suits Walter because it is a full-time job, but not full-time on the training ground. The pressure is still there. But he can handle that. He’s a wily fox, always has been. He knows how to handle the press, knows how to handle big pressure situations.
“Don’t get me wrong, for me, it’s a modern-day game and management is changing so much. But Alex Ferguson changed with the times and I think Walter knows how to change with the times too.
“He’s worked with players before just when the game was changing. He’s been in this era. He knows how to work it.
“He’ll get people in who probably know that side of the job. It’s not a daft idea to approach him, I would definitely say that.”