The 31-year-old former Leeds and Manchester United midfielder has made just two substitute appearances for the Magpies this season and has now joined the promotion-chasing League One club.
Newcastle confirmed in a statement that Smith would be available to make his debut when the Dons face Sheffield Wednesday on Tuesday night.
The loan arrangement also contains a provision for Smith to play for the Dons in the play-offs. They are currently fifth in the League One table.