O'Neill said: "I think Fredy (Bouma) has done very well indeed. I am sure deep down he is pretty pleased with himself after the way things have gone this year.
"I don't think it was a case of anyone winning me over after I came here nearly two years ago but a case of seeing what people are capable of doing.
"In fairness to Fredy, he got injured relatively quickly after I came here and was actually unavailable for my very first game in charge against Arsenal.
"Fredy has had a few injury problems but this last season was the longest spell he had stayed injury free, which is a major consideration in people doing well.
"We are happy to take up at least the year option on Fredy's current contract and we are hoping to do an extra year on top of that."