The 20-year-old is a product of the Premier League club'ss academy, but has yet to make a first-team appearance.
"He's a ball-playing midfield player, very comfortable on the ball and a good passing range," Blackpool boss Neil McDonald told BBC Radio Lancashire.
"Hopefully he can come into the squad and add that competition and force his way into the team."
Smith is available for the Tangerines' game at Millwall on Saturday.
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League One side Blackpool have signed Newcastle United midfielder Liam Smith on loan for the rest of the season.