Goals from Andy Williams and Simon Ferry looked to have set Town on course for victory at the County Ground but Jamie Paterson's dramatic last-gasp leveller following Will Grigg's first-half penalty maintained the Saddlers' blistering form.
Walsall had won 10 of their previous 14 games going into the encounter and the point extends their current unbeaten run to seven games.
Smith said: "A draw was a fair result. We were better in the first half but they were better in the second. We dropped deep and let them take control.
"We scored two good goals and might have had a second penalty when our player was pulled back at the far post.
"There wasn't much between the sides and we have come back twice against a very good side.
"The result shows how far we have come. Although we are disappointed with the goal we conceded."