Smith was flown to Sri Lanka before Australia's opening clash at the global tournament against Ireland after captain Mitch Marsh took a blow to the groin area.
Marsh has been cleared to train while Marcus Stoinis had no serious damage to a thumb issue after leaving the field in the defeat against Zimbabwe.
Hazlewood withdrew from the T20 World Cup before the tournament, with Australia leaving the vacant spot open which has now been filled by Smith, who is available to play against co-hosts Sri Lanka on Monday.
"ICC regulations stipulate any squad change must be submitted and activated at least one day prior to a match," Australia selector Tony Dodemaide said.
"With Steve here, along with some uncertainty around Mitch and Marcus Stoinis, it made sense he (Smith) is activated and available for selection in time for the match, if required."
Smith is not regular for the Aussies in the T20I format but had a good Big Bash League campaign where he scored 299 runs at 59.80 with a strike rate of 167.97 for the Sydney Sixers.
Azmatullah Omarzai starred with bat and ball to help Afghanistan register their first win of their T20 World Cup campaign after beating UAE by five wickets with four balls to spare.
Pakistan head coach Mike Hesson admits his team "probably took a little step back" in their defeat in the high-stakes T20 World Cup clash against India in Colombo on Sunday.
A sensational 77 off 40 balls from Ishan Kishan propelled India to a commanding 61-run victory over Pakistan in Colombo on Sunday, securing their place in the Super 8s and extending their dominance over their arch-rivals in World Cups to 8-1.
The USA were impressive in their 31-run victory against Namibia in their T20 World Cup Group A match in Chennai on Sunday.
