Smyly should definitely be re-signed to a team friendly type deal, say 2 years, with incentives for IP, etc.
He's regained all his velocity pre-TJ, He was throwing 92-94 today. His command is still erratic, but that's often the last thing to come back.
He may be a marginal 5th starter next year, but there's a real possibility he can be a "bounce back" and a cheap rotation piece for a couple years. Worth gambling a few million out of the cap room that you gave Neshak.