What other exercise would you recommend in place of the squat to develop lower body strength?
Anything that helps him to build strength and keep himself from aggravating his previously injured knee, which he himself admitted was due to using the smith machine.
Deadlifts, learn to power clean so he can front squat, hell even heavy prowler pushes (he probably won't have access to that) or pushing a car would be preferable, in my opinion, then trying to squat properly using the smith machine. Pistols are another option too.