Milner scored a second-half winner for Villa in their 2-1 win at Wigan.
“It was an extraordinary performance by a really good player,” O’Neill said.
“Since he has stepped into central midfield his game his improved tenfold and he continues to go from strength to strength.
“When you play wide you depend on other people giving you the ball to get into the game but when you have got that determination and energy, you might as well use it in the centre of the field.
“It is something we have been crying out for, a midfielder scoring double figures, and he has been sensational.”
Villa have a game in hand and are just three points of fourth-placed Tottenham.
O’Neill added: “It was important for us to close the gap. We did that tonight and it was a brilliant win for us.”