The Reds have shelved their scheme to move away from their home for the past 120 years to a new purpose-built stadium and will instead focus on improving their current ground.
Smith, who made over 450 appearances for the Merseyside outfit in the 60s and 70s, has welcomed the club's decision to stay at their spiritual home.
And he believes that there is the potential to attract even higher numbers than the anticipated increase in capacity of 60,000.
Smith told Sky Sports News Radio: "Anfield is something that nobody else in this world has got.
"Any person that I have played with, or any person I know, says that it is not a good idea building another ground elsewhere.
"Anfield is a place that as soon as you get there it is about football.
"I honestly think that they could get to 75,000. Don't forget that it is Liverpool. If you look at playing at Anfield against big teams in Europe it is crowded to the last person.
"I'm a bsolutely made up that they are going to have 60 or perhaps 70,000."
Listen to this interview on the Sky Sports News Radio player at www.skysports.com/radio
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