The Whites striker has found game time limited at Craven Cottage since joining in the summer of 2014.
The 27-year-old has only made 51 appearances in the Championship in that time, with just 20 of those from the start.
Smith was Fulham's third choice striker last season, given the form of Ross McCormack and Moussa Dembele at Craven Cottage.
McCormack left for Aston Villa in the summer, with Dembele also departing for Celtic at the end of his contract leaving Smith as Fulham's main striker.
He scored twice in two games at the start of the season but found himself down the pecking order after the signing of Chris Martin.
And Slavisa Jokanovic has given the green light to a deal to be done with Rangers, while Fulham are on the hunt for a replacement striker.