The 28-year-old Taylor played seven tests and 27 one-day internationals (ODI) for England but retired from professional cricket in 2016 after being diagnosed with a heart condition.
"He (James Taylor) can bring his recent experiences and insights to selection, as we seek to identify the best players to drive forward England's teams in all formats," Smith told the cricket association's website.
"I know that James wants to channel the dedication that shaped his playing career into the new challenge of Talent ID and selection."
Taylor, who also played for Leicestershire from 2008 to 2011 and Nottinghamshire from 2012-16, expressed his delight at the appointment.
"I'm thrilled to be taking up this role with the ECB and once again supporting the England set-up," the right-handed batsman said.
England are currently playing India in a three-match ODI series followed by a five-match test series.
(Reporting By Arnab Paul in Bengaluru; Editing by Keith Weir)
