Gatland, himself a former All Black, coached the Lions to a 2-1 series victory in Australia in 2013 and on Wednesday was handed the task of leading the inter-national selection to a first series triumph in New Zealand since 1971.
Back in his native Hamilton to watch the All Blacks play Argentina on Saturday, Gatland said Smith was a major factor in New Zealand's brilliant form this season.
"To be honest I think they've taken the game on to another level," Gatland told New Zealand's Sky TV.
"I think there's one player in particular, in my opinion, who is the driving force and the key, and that is Aaron Smith. I just think he's the best player in the world at the moment.
"You take him out of that All Black team and they might be a little vulnerable, he's pretty special."
The Lions have won only one of their 11 series against the All Blacks and were swept 3-0 in the tests on their last visit in 2005, when England's World Cup-winning coach Clive Woodward was at the helm.
Gatland said he was hoping to watch all of New Zealand's remaining tests in the Rugby Championship and the one-off third test against Australia in Auckland that follows it.
The 52-year-old, who is handing control of the Wales squad to Rob Howley while on Lions duty, said he would be naming his backroom staff on Dec. 7 and his squad in mid-April next year after spending some time with the England, Scotland and Ireland squads.
"It's a huge honour to be asked to lead the Lions again," he said. "I'm really looking forward to it, it's going to be a massive challenge but hugely exciting."
(Reporting by Nick Mulvenney in Sydney, editing by Sudipto Ganguly)
