McCann faces his old manager today for Bolton Wanderers and O'Neill told the club's website: "He had a year left on his contract and I would have wanted him to be a part of this football club for the future.
"I want competition for places. I couldn't imagine Gavin was happy. He's not that type of person anyway. The type of rotation that goes on nowadays wasn't for him. Gavin would want to play every week. What I would say about Gavin, is that for the first three or four months of last season, he was absolutely terrific. But it was a long season for all of us and he was on the go for all of it. We never had the strength in depth to allow people to step out of it.
McCann's best spell last term came around the turn of the year as Villa were struggling for points. O'Neill added: "Against Portsmouth, he was snapping and snarling that was really him and he was excellent. That's a part of his game.
"He can get the ball and manoeuvre into certain situations and score, as we saw against Manchester City.
"When he was doing that for us, then suddenly two or three others who didn't normally do that sort of thing were encouraged by Gavin. Down at Charlton, I remember him putting the through ball for Gabriel Agbonlahor in the 88th minute when we nearly took the three points instead of them.
"Against Chelsea at home in January, Gavin did superbly. In the second half he was astonishing for us, outstanding, terrific. He went racing down to the corner flag just to get a foot in. He chased back and he was the one who has tried to get things going for us.
"He was terrific for us at that time. He was well appreciated in the dressing room and he was great here. He wanted to play all the time, even through the pain barrier, and some players are like that. He was definitely an unsung hero, definitely no doubt about that.
"He's a complex character, McCann. I'm pleased to have known him! Some people get praise for what they do but McCann just got on with things."