Davies, signed on loan from West Brom with a view to a permanent deal, claimed he would struggle to break into Villa's Barclays Premier League side on the strength of that performance.
But O'Neill insisted: "Curtis was very harsh on himself. It was his first game. Quite naturally he was nervous about it.
"It is really refreshing to hear Curtis talk about the fact he feels he didn't play well in that game - but he is far from being a pub player.
"It is pleasing for me that players like Curtis and Nigel Reo-Coker want to come to Villa."