Sunderland need to drastically change what they are doing if they are to drag themselves up the table.
O'Neill said: "I came here last season and the morning that we played against Blackburn, we were in the bottom three.
"I had been asked the question the previous day, 'Do you think you are in a relegation battle?' Well, of course.
"It's tough, it's tough for quite a number of teams. It's a surprise, I suppose, that you find Newcastle, with the season that they had last year, in that position.
"It's not monumentally surprising for a lot of clubs like ourselves."