Anecdote, Tall Tale
The frame story (the story of how the narrator ended up talking to Simon Wheeler) doesn’t really have any point to it. It’s just an anecdote, like some funny story you might tell your friends over lunch, but which doesn’t really have a point to it. As for Wheeler’s story about Smiley, it’s a classic tall tale, with absurdity of characters (especially the animals) playing the major comic role. Since tall tales traditionally have been more appreciated in the West, the setting is appropriate.