The striker has been released by Pompey after just one year in the senior ranks.
Following a successful loan spell at Bognor, Smith moved to Cork in February but struggled for regular minutes at the League of Ireland side.
Along with Dion Donohue, the 19-year-old wasn’t offered fresh terms at Fratton Park.
It was because Jackett didn’t feel Smith wouldn’t be competing for the number-nine spot in his side next term.
But the boss believes that doesn’t mean the forward won’t climb back up the Football League ladder.
Jackett said: ‘We generally want to be working with a squad of 24 and have an extra forward and extra goalkeeper on top of two players for every position.
‘For Dan to break into that, he needed to play more at a higher level this season.
‘He had some Checkatrade Trophy games and to be fair had a great game at right-back at Southend.
‘But he wanted to be considered as a forward and ultimately I couldn’t quite see him breaking in next season.
‘For every player, you have to have a plan. It would have been for Dan to compete for the number-nine spot and I didn’t think he was quite there yet.
‘We wish him all of the best and leaving this club doesn’t mean it’s the end of the road. It can be the start.
‘Building up towards 21, 22 or 23 then he might have enough experience and knowledge to come back to this level. I do think he is capable of it.
‘Our number nines going forward do need to be strengthened and it’s going to be key.’