Young is struggling to make an impression in Fabio Capello's England squad.
O'Neill said: "Does Young lack a bit of confidence when with England? He might do. I don't know that. That is something that seems to be on the rumour mill, that he doesn't exude the same self confidence.
"If that is the case, I understand that. Sometimes you get someone believing in you, which I do with Ashley Young who is naturally vibrant.
"But sometimes when they go away and are mixing with a group of other people, sometimes you don't want to be the same character because you think of all those great players England possess who have been there and done it.
"There is a tendency to be a wee bit quiet but it doesn't mean you should desert your own character."
O'Neill added: "Ashley doesn't have to go and show off with England.
"All he has to do is go in and perform in the manner he has for his club because that is what Mr Capello is doing, picking players on club form."