The striker moved to Cardiff City last week.
O'Neill said: "There was always interest in Frazier. We said we would prefer him not to go until we got someone in and it was then Matthew Kilgallon tweets that he is going to Cardiff.
"So I allowed him to go. I felt this was a big opportunity for Frazier, he didn't want to disappear and so I allowed him to go but I am hoping something will develop for us."