The 21-year-old has been solid after joining the Bees on a season-long deal from the Premier League champions.
And Smith believes that Elder will settle down and get stronger as a player over the course of the season.
He said: “Callum Elder has been steady. He'll get better the longer he's here. It's been a whirlwind four, five weeks for him going into a Championship team from Leicester.”
Elder was brought in to replace Jake Bidwell and Smith dubbed the Foxes youngster as the standout candidate when analysing the QPR man's replacement.
He added: “I don't think about that as once the player has gone, he's gone. We believed that Callum would be the right one for us.
“He performed really well for Peterborough and we had no question about bringing him in. He was the standout option for us.”