Smith is out of contract after his deal expired earlier this year.
“The ideal outcome is Walter stays with Rangers,” Johnston told the Daily Record.
“But there are a lot of moving pieces which need to be addressed and Walter needs to be satisfied he is making the right decision.
“I’d like to think we’ll have a clearer picture in the next two weeks to allow Walter to make his decision.”
Johnston also claimed the club would have money to spend for the first time in two years.
“I feel confident we will have some money to spend,” he said.
“We have players out of contract and a lot of current players we would like to look at retaining.”
