"It has crossed my mind, of course," Harbaugh said Monday.
Harbaugh said Smith told him that 2016 is his final season. Smith initially announced 2015 would be his last one, but he changed his mind after suffering a season-ending Achilles injury in the middle of the season.
The NFL's oldest receiver, Smith hasn't shown signs of wearing down at 37. He ranks third on the Ravens with 44 catches and second with 516 yards receiving despite missing two games with an ankle injury.
"If he wants to come back, he's welcome. Absolutely," Harbaugh said. "You like every good football player you can get. But I don't want to speak to Steve. He's had unbelievably awesome career."
In Sunday's 27-17 loss to the Cowboys, Smith joined the likes of Jerry Rice, Marvin Harrison and Cris Carter in the 1,000-yard catch club.
"So, he needs to be commended for that," Harbaugh said. "Congratulations to Steve on that accomplishment. I'm looking for many more this year."