"But if the players are free to speak to people, and they are capable of speaking to people and it's not the deal they had hoped for, then it's entirely their prerogative."
Laursen made just 25 league starts in his first three years in England, but O'Neill has dismissed suggestions the former AC Milan man 'owes' Villa.
He added: "Most of that wasn't in my time and I wouldn't be saying what people owe. Martin has come through a lot of games and feels much stronger, but I have certain things to look at, especially with players coming to 30 years of age.
"Not for one minute do I think 30-year-olds in this day and age aren't capable of going on until they're 34 or 35. But I have to take some things into consideration and players have to remember that."