'Home Improvement' Kid Taran Noah Smith -- Arrested for DUI and Drug Possession

Taran Noah Smith, the youngest kid from "Home Improvement," was arrested early this morning for alleged DUI and possession of drugs -- hash, to be specific.

Law enforcement sources tell TMZ ... 27-year-old Smith was arrested in LA County around 1:00AM. Cops believe he was under the influence of marijuana at the time of his arrest -- and we're told they also found a stash of hash ... a type of marijuana.

Smith, best known for his role as little Mark Taylor, is still in custody ... currently being booked for the DUI and the drug possession, which is a felony.

Sources tell us ... Smith was behind the wheel of his 1998 silver Honda Accord, which was parked at an angle in front of a fire hydrant when an officer decided to investigate the situation.

We're told the officer smelled a "strong odor" of weed and believed Smith was under the influence.