England deployed Smith at full-back in during the World Cup in France, including their quarter-final victory over Fiji.
Smith was injured in the first half of that game and subsequently missed the semi-final defeat to South Africa, but England boss Steve Borthwick could opt to continue playing him there with skipper Owen Farrell and George Ford strong options at 10.
Former England boss Jones, who this week resigned from his post as Australia head coach, said: “Look at Richie Mo’unga (New Zealand outside-half), he is 29, experienced and he plays a great World Cup.
“Marcus is 24, he has got a lot of learning to do but unless he plays he never gets that learning.
“At some stage you have got to take a bit of pain if you play a guy like him. He is a good player, a very good player but he is not a full-back.
“That is up to Steve, but if you want to develop him as a player of course he has got to play 10.”
Jones led England to three Six Nations titles, including the Grand Slam in 2016, and to the final of the 2019 World Cup during his reign between 2015 and 2022.
The 63-year-old was appointed Australia head coach for a second time in January 2023, just one month after the Rugby Football Union sacked him for a poor run of results in which England had won just five of 12 Tests in 2022.
Asked at a Barbarians pre-match press conference, in which he will take joint charge of the invitation team against Wales in Cardiff on Saturday, how far he could have taken England at the World Cup, Jones replied: “That’s not a question. That’s a dream.”
On England’s campaign, he added: “They were really competitive. They fought hard and played tough.
“Steve did a really good job, he went back to English rugby which suited the tournament.”
Jones insisted his role as Australia head coach would have been compromised had he stayed in the job.
He will officially depart the position on November 25 after Australia failed to reach the knockout stages of the World Cup for the first time in their history.
“Post the World Cup there was always going to be a decision to be made whether we were going to change Australian rugby or not,” said Jones, who was reportedly interviewed by the Japanese Rugby Football Union before the tournament over becoming their head coach.
“I went in with a plan and had a commitment from Rugby Australia what that looked like.
“When the unity of where we were going wasn’t the same, not because of the lack of desire from Rugby Australia but there’s other forces at play, then the only thing I could do was resign.
“Obviously the results are disappointing, but I went in there with a plan to change Australian rugby, which not only involves the team but the system to put it together.
“When you’ve had 20 years of unsuccessful rugby that’s because of the system. I went in with a plan of how to change the system and that’s unable to be changed. I felt my job would be compromised for the next four years, which I wasn’t prepared to do.”
Jones insists his future in coaching is “up to others”, but he has ruled out the idea of coaching the British and Irish Lions on their 2025 tour of Australia.
He said: “I have moved from the northern hemisphere to the southern hemisphere.
“I had my go with England, I loved coaching England, and I wouldn’t want to be involved in the Lions. Not at all.”