Villa are currently struggling with creativity because of Jack Grealish’s injury, and Hourihane could have been a useful option for them.
Apart from scoring goals, the 24-cap Republic of Ireland international is excellent from set-pieces, and keeping him as a squad option would have probably been a wise move.
The Premier League club signed Morgan Sanson from Marseille for a fee of around £14 million after loaning Hourihane out to Swansea, and the Frenchman is still adapting to his new surroundings.
The likes of Ross Barkley started the season well, but the on-loan Chelsea midfielder has been quite poor in recent months.
When Smith decided to loan Hourihane out, he had three creative midfielders at his disposal in Grealish, Sanson and Barkley.
However, Barkley and Sanson have not been at their best and Grealish’s injury has left Villa lacking creativity.
Villa’s form has dipped considerably in recent weeks. The Midlands club have picked up just four wins in their last 15 matches in all competitions, and the players are under pressure to turn their season around.
Smith’s men are in a good position in the Premier League, and European qualification is still very much on the cards. They are currently ninth in the table with 41 points.