The plan is to keep Galloway as the current backup with Nelson more of an insurance policy for if Smith were to go down with an injury.
Nelson will bring veteran leadership.
Smith played with Nelson with the Magic during the 2011-12 season.
"He was super helpful," Smith said in a text to the Free Press.
In 43 games with the New Orleans Pelicans this season, Nelson averaged 5.1 points and 3.6 assists per game. He shot 36.4 percent from 3-point range.
Nelson is under a one-year, $2.2 million deal and will be an unrestricted free agent in the offseason.
Multiple reports said the Pistons targeted Pelicans swingman Dante Cunningham with Brice Johnson as the trade bait.
But they pivoted to Ennis, 27. He is a career 37 percent 3-point shooter.
Ennis is in the final year of a two-year, $5.9 million deal. He will be an unrestricted free agent next offseason.
It would appear Ennis faces a tough path to consistent playing time.