The forward has earned his first Three Lions call-up for the World Cup qualifiers against San Marino, Albania and Poland this month.
Watkins, 25, has scored 12 times in 30 games for Villa since his club record £28million switch from Brentford last summer, and international recognition was always a top priority.
Smith said: "One of the questions when I was talking him into coming to Aston Villa was he asked me how I could get him into the England squad. He has got himself into the England squad with his performances.
"It's just sign of his mindset, the way he works and the way he thinks. He is always looking to progress and I believe we are a progressive club and we sold that to him when he was deciding to come.
"He has always wanted to keep getting better and England was in his mind, and he has earned that right by putting the performances in.
"I never questioned whether he could handle the jump. He had outgrown the Championship and was ready for the move to the Premier League.
"Last year he was the top scorer in the Championship and we believed he could make that step up.
"He's one of the most hard-working individuals I've worked with. The biggest thing has always been his attitude and selfless nature to the team."
Watkins has scored 25 per cent of Villa's top-flight goals this season and has hit the woodwork seven times, more than any other player in the Premier League, Ligue 1, Bundesliga, La Liga and Serie A.
Smith added: "There's a chance (Grealish will be fit), I'm not sure. He has not trained with us fully yet but he is pain free and he's running. If he doesn't make this weekend I can certainly say 99 per cent he he will be ready for Fulham after the international break.
"I am hopeful for this weekend but ultimately I have to make sure he is OK on Sunday morning."