Through MessageCommunication with the Event Server you can listen for changes to the configuration. (Using MessageId.System.SystemConfigurationChangedIndication)
The ConfigUpdated sample shows this. This is a Standalone sample but I suggest you copy the way it subscribe to this to your Smart Client plugin.
On the internal messaging in the Smart Client you can use “SmartClient.ReloadConfigurationCommand”
Basically this will do the same as if a user has setup a keyboard short cut key to use the “Reload server configuration” action like this -
A word of caution: The reload of the configuration practically restarts the Smart Client, it takes time depending on the system configuration size and if the user is in the middle of something it is interrupted and reset. Do not implement a plugin that does this automatically. A better option is if you warn the user with a dialog stating that the configuration has changed and if the user okays it does the reload.