Moustapha Salifou has seen his impressive performances for Aston Villa's reserves rewarded with a one-year contract extension.
"We are taking him on for the extra season so he is here for another 18 months," O'Neill told the Birmingham Mail.
"He has been a wee bit unlucky because just when he was forcing his way in he hurt his knee again but he is okay now.
"He played for the reserves the other night and did fine and he has been playing very well.
"Can he make the step up?" continued O'Neill.
"The step is all about someone coming in and having the confidence in that player to go and do it.
"Where I get irked is that on Sunday we went into the match on the back of an eight-match unbeaten run.
"Then because we have lost (2-1) at Fulham and even though people in midfield might be playing well, it suddenly becomes 'Salifou is playing really well'.
"I used to be a miles better player when I was not playing. Honestly, it was great. I used to get a better reputation when I wasn't playing than I did and was rubbish"
O'Neill even suggested that Salifou may benefit more from being sent out on loan than continuing to plough away in Villa's reserves.
"He is one who is itching to play competitive football," said O'Neill.
"It would be great if it was with us.
"In an ideal world I would like to get some of the boys out (on loan) and maybe give them that 28 days as we now have a week coming when we don't have a game."