Neville thinks boyhood Sunderland fan O'Neill was not offered enough time, having only taken over at the Stadium of Light in December 2011.
"I would never advocate a change being made," said Neville. "I would never sit here and think a manager who was appointed 15 or 16 months ago as a messiah goes to becoming the villain all of a sudden and is responsible for everything.
"He has spent some money at the start of the season but it is no time in the job. It is no time to build what he wanted to create up there.
"Ellis Short's decision, I think, is gut instinct. Maybe he has not liked things he has seen or heard in the past weeks. But, to me, he has thought, 'I'm going for it'. And has he gone for it!"