Smith also set US all-comers' records for the half marathon, 10 miles (51m 4s) and 20km.
Ethiopian runners were next to finish behind Smith, with 2003 world cross-country champion Werknesh Kidane recording 1h 7m 26s and Deba Bizunesh 1h 9m 53s.
It was a great comeback for Smith after her disappointment in the Boston marathon in April where she was forced to pull out with a torn calf muscle after holding a huge lead after 10 miles.
Smith said that she needed this victory for motivation.
"I knew I was running fast, but I wasn't sure what my times were translating to - history it turned out."
Smith and Kidane ran together until the final mile - where Smith took the lead. Kidane was unable to sustain Smith's pace.
"I wore her down - she was tough - to beat her is something - she's a world champion," said Smith.
Meanwhile, Valerie Adams won her last shot put competition of the season with a throw of 20.59m at a meeting in Bad Kostritz, Germany.
Adams said it was a great finish to the year and she was happy with the performance and that her overall average for 2011 was way above any other year in her career.