Sunderland went down to a 72nd-minute goal from substitute Tom Parkes in the Midlands following the midweek draw at Derby.
"We have plenty to work on," O'Neill told safc.com. "There are a number of areas which need strengthening.
"Today, the second half was played at a better tempo than most of Wednesday night [at Derby].
"It's Leicester's final game of the pre-season too before they kick off and I think the game had more of a competitive edge to it."