Smith, who was revelation in Ashes 2019 against England, makes a return after more than three years.
Meanwhile, the likes of Warner and Mitchell Starc are back as well.
With World T20 in 2020, preparations start for Australia
With the ICC World T20 in 2020, all the teams are currently focusing to build a side in order to have the best combination.
For the Aussies, it's a bigger motivation given the tournament is set to be played on their home soil.
It is also a tournament that the Aussies have never managed to win in six attempts.
That's a massive factor.
A look at Australia's 14-man T20I squad
Australia's T20I squad: Aaron Finch (captain), Ashton Agar, Alex Carey, Pat Cummins, Glenn Maxwell, Ben McDermott, Kane Richardson, Steve Smith, Billy Stanlake, Mitchell Starc, Ashton Turner, Andrew Tye, David Warner, Adam Zampa.
Warner aiming to continue strong white-ball form
Warner last featured in a T20I back in February 2018. That was before the 12-month ban he received for a ball-tampering scandal in South Africa.
Warner was in excellent form since his return to action this year.
He won the prestigious Orange Cap in the Indian Premier League 2019.
And then, the southpaw finished as the second-highest run-getter in the 2019 World Cup.
Squad selected with World T20 in mind: Trevor Hohns
"It is almost a year to the day until Australia hosts the men's Twenty20 World Cup and we have selected this squad with that in mind," said Australia National Selector Trevor Hohns.
The selectors left out key T20I players such as Usman Khawaja, Marcus Stoinis, Shaun Marsh, D'Arcy Short, Jhye Richardson, Peter Handscomb, Nathan Coulter-Nile and Nathan Lyon, all of whom were a part of the T20I series against India earlier this year.
Meanwhile, pacer Jason Behrendorff has opted to undergo spinal surgery for his recurring lower-back injury.
Smith will want to improve his show
Smith will be wanting to make his presence felt as well after an excellent Ashes 2019. He has featured in just 30 T20Is for Australia and amassed 431 runs at 21.55. So he will want to improve on his numbers.
'The squad we have selected is quite role-specific'
"We have looked to put a squad together that we think can take us through to that tournament. The squad we have selected is quite role-specific and we believe it gives us the flexibility to thrive in all match conditions," added Hohns.