Plymouth Argyle have reportedly offered Smith a deal until the end of next season, with the 35-year-old keen to extend his playing career before moving into coaching.
A photo emerged on Wednesday of what appeared to be Smith walking alongside Pilgrims manager Derek Adams in the Devon city.
Dryden, however, told reporters on Thursday: "Alan is in the squad.
"Alan is Alan. He comes in and works hard, people look up to him as a leader.
"He's going to be involved with us from now until the end of the season hopefully. I take it he is still going to be here."
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