The 19-year-old returns to Woodside Road on a free transfer after leaving Brighton & Hove Albion in the summer following the expiration of his contract.
He spent the first half of last season on loan with the Rebels, making 20 appearances across all competitions and scoring one goal.
His new boss Chris Agutter, who worked with the winger while coaching at Brighton’s Academy, commented, “We felt we could do with a bit more pace, power and mobility and Bailey has certainly got that.
“He’s a direct runner who will carry the ball and be aggressive. He’ll be somebody that gets the supporters off their seats – I’d be disappointed if, when he gets the ball, he doesn’t drive at the full-back. It gives us a good option in forward areas and a different type of option which I felt we were lacking.”
Originally from Worthing, Bailey represented the Reds at under-14s prior to being picked up by the Seagulls.
He also excelled in athletics growing up, winning an ESAA gold medal in the 200m aged 14, recording a time of 22.56s, the fastest in the UK for his age group at the time.
Smith will wear the number 24 shirt for the Rebels and is available for selection for this Saturday’s match against Enfield Town.
