Celtic had imposed themselves better on the game before Thomson's goal but Smith felt the goal was quite literally the turning point for the home side.
Thomson's neat one-two with Jean-Claude Darcheville and composed finish was more in keeping with what Smith had expected from the league leaders.
"I told the players at half-time that that was the level of football we should have been playing," Smith continued.
"In the first half Celtic created some chances but we restricted them well in the second-half."
Celtic went for height and muscle up front with the twin strike-force of Georgias Samaras and Jan Vennegoor of Hesselink, but Smith felt his defence coped admirably with the aerial onslaught.
"The boys handled the high ball well all day, especially in the final 20 minutes. And Allan McGregor made a terrific save."
With the match delicately balanced at 1-0 McGregor leapt athletically to tip Andreas Hinkel's goal-bound shot over the bar.
In doing so he became the first Rangers goalkeeper to keep four consecutive clean-sheets against Celtic.
"I thought Andreas Hinkel's shot was hitting the bar. I was hoping it would, but Allan somehow managed to reach it," Smith said.
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