Fault current limiters (FCLs) are proposed widely in literature for improving different characteristics of electric power system. Solving protection problems in smart distribution networks in presence of distributed generation (DG) is an example for the applications of FCLs discussed in recent papers. Voltage sag during faults is a power quality (PQ) concern in the power system. In this paper, it is shown that in smart distribution networks including microgrids, FCL can effectively alleviate this problem, according to the fault location. Therefore, a bidirectional non-superconducting fault current limiter (BNSFCL) is presented in this research, so that the bidirectional fault suppression has become available. Analytical analysis and simulations are provided to validate the effectiveness of the BNSFCL topology. Results show that by using proposed structure in distribution networks with microgrids, both protection and PQ status are enhanced, i.e. the BNSFCL prevents deep voltage sag and protection mis-coordination. The proposed topology can be applied in smart grid architecture _where the bidirectional current flow has made conventional protection schemes useless_ effectively and can have acceptance for implementation as one of the future power system components.