Paulo Dybala’s future will be decided within the next two weeks, says Palermo chief Maurizio Zamparini.
Cardiff will allow long-serving Kevin McNaughton to leave this summer along with Danny Gabbidon and Nicky Maynard.
Smithies has agreed an extension to his current deal, which runs until the summer of 2015, to commit him to Town until June 2016.
However, the club have also negotiated a further year's option on the former England youth international.
Smithies played a significant role as Huddersfield preserved their Championship status last season. His form was so influential that his team-mates voted him their player of the year at the club's annual awards ceremony.
The 23-year-old has again been in excellent form this term with the Terriers currently having the second best defensive record in the division.
"We want to keep our quality players and we're delighted that Alex has agreed to extend his contract at Huddersfield Town for the long term," said Town manager Mark Robins.
"I think he can see the progression of the Club on and off the field and as a local lad, who is home-grown, he has a real passion for the Club and drive to add to that success.
"He has been in superb form this term and has been integral, not only to our impressive goals against record, but also in helping the team adapt to a new style of football.
"Alex is still a young 'keeper who will only get better with age and games, but he already has experience well beyond his years. He works hard on the training pitch and is constantly looking to improve, which is what we desire from our players"