He's a small talking ball of red-orange and green dust.
He is the high-pitched minion of Crud, the filthy ruler of Under the Bed kingdom. He has got two main hobbies: uncontrollable sneezing and praising Crud, calling him respectful names like "the master of mud", "the surveyor of slime", "the guru of garbage" and "the wiseman of waste". He's got a special ability to slither around incredibly fast.
When he found Tigger and Christopher Robin under the bed, he made dusty circles around them. He took them to Crud and presented them to him. He is incredibly loyal to Crud and is willing to do anything he's told to do. If he were to speak out of turn, Crud would likely spill some of his own slimy filth on him to shut him up. Instead of taking offense, Smudge is grateful and takes it tolerantly. When Christopher overcame Crud and sucked him up in Crud's reverse vacuum cleaner, he called for Smudge, resulting in both going to their fate.