South Africa narrowly failed to bat out the final day's action in Cape Town, with Ryan Harris removing Dale Steyn and Morne Morkel in the fifth-to-last over of play to clinch a dramatic 245-run victory for the tourists.
This sealed a 2-1 series win for Australia and signalled a disappointing end to Smith's international career, after the 33-year-old announced his retirement from national-team duties following this Test earlier in the week.
However, Smith, who admitted to the last few days being "emotional", was pleased with the way South Africa battled to the death at Newlands.
"The resilience and the courage shown today was immense," he said in the post-match presentation. "We've been outplayed throughout this Test match so we needed to show something today.
"It's something we've prided ourselves on and I congratulate Michael Clarke and his team for a terrific series victory."
Smith went on to say he had been contemplating retirement from the international arena for some time, and feels now is the right moment to bow out after playing 117 Tests and 197 one-day internationals for his country.
"It's been an emotional few days," he added. "It's been on my mind from the beginning of the series but for various reasons I kept putting it off.
"I felt this was where I wanted to retire, I have so many wonderful memories here so it felt like the perfect place to finish my career.
"To have shared a dressing room with so many terrific players has been a dream come true, and I'm certainly looking forward to spending a huge amount of time with my family from now on."
Victorious captain Clarke was full of praise for his opposite number, and said the win was testament to the hard work his side had done.
"I want to thank Graeme Smith and South Africa for an amazing series," he said.
"He's a great player, a great leader - he deserves a lot of credit for what he's achieved and he's someone I look up to.
"It's been tough away from home for a while now, we've gone through some tough times in India and England but to be able to turn it around is something the boys should be extremely proud of.
"I didn't enjoy much of today to be honest but we'll enjoy it now. When you get results like this it's about the hard work you put in.
"We know there's a lot of work to do to get where South Africa are, and that's the goal."