The deal runs until January 2.
Smith, one of our longest serving players after joining Reds in 2014, has made 169 appearances for the club, although he missed most of last season following knee surgery.
Director of Football Selim Gaygusuz said: "Jimmy has opted to to go Yeovil so he can get some game time under his belt. After missing much of last season this is something he needs and we wish him all the best at Yeovil.
"He will come back to us in January and I'm sure he will work hard to try and force his way into the squad in the second half of the season."