Midfielder Denis Glushakov flicked the ball over goalkeeper Stefan Marinovic in the 31st minute as New Zealand defenders rushed back to try to clear it off the line.
Smolov then doubled his country's lead after starting and finishing a free-flowing move in the 69th minute.
The Russian national team will play with the Portuguese team, which is acting Europe's champion, on June 21 in Moscow.
The Confederations Cup's final is due in St. Petersburg on July 2.
New Zealand coach Hudson, whose team face Mexico next in Sochi on Wednesday, was keen to take the positives from the game, insisting that playing on such a stage was only beneficial to a group of players whose competitive action typically extends to qualifiers against the likes of Tahiti, New Caledonia and Papua New Guinea.
The last time Russian Federation fans were really celebrating was Euro 2008, when Guus Hiddink led the team to a quarter-final victory over Holland, leading to wild scenes of celebration on the streets of Moscow and the team being welcomed home as heroes despite a crushing semi-final defeat by Spain.
Shprygin, who was twice deported from France past year during Euro 2016, said he had been notified by organisers that his fan-ID, needed to attend matches, had been cancelled.
Michael Boxall believes the All Whites can take an "all or nothing" attitude into their second group game at the Confederations Cup against Mexico.
Russian fan leader Alexander Shprygin, who was deported from France during Euro 2016, told Reuters on Saturday that he had been barred from attending his country's match against New Zealand just a few hours before kickoff.
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Euille said he heard from a YMCA employee that Hodgkinson had terminated his membership Monday, two days before the shooting . The 66-year old lunatic James Hodgkinson also volunteered for DEMOCRAT Senator Bernie Sanders' presidential campaign.
The 63rd-ranked home team handled the pressure superbly in front of president Vladimir Putin and a 50,000-strong home crowd at the sparkly new Krestovsky Stadium, proving far too polished for their 95th-ranked visitors.
"I liked New Zealand's team, but luckily we managed to cancel out their strengths and displayed ours", Cherchesov said.
"For us it is very important to make people in the country fall in love with the national team", said Smolov, the 27-year-old FC Krasnodar forward who was named the game's best player.
With an average age of just 24 years and four months, and a combined total of 179 worldwide appearances, Germany have the most youthful squad of the eight Confederation Cup teams.
Playing in the tournament for the first time, Russian Federation were on the front foot and had two early chances cleared off the line in the opening 10 minutes.
When the goal came, it had an ugly finish after two pretty pieces of individual skill once the All-Whites defense needlessly lost the ball.
Russia's victory showed it can win a big game at home, even if Putin is in the arena.
However, the Socceroos have arrived in Russian Federation on the back of a narrow 3-2 World Cup qualifying win over Saudi Arabia earlier this month despite a 4-0 hammering by Brazil in a friendly in Melbourne.
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