The England Under-21 international joined Aston Villa from Newcastle om the summer.
“My own view is that if James had been given a new contract at Newcastle I think he would have stayed,” said O’Neill.
“James had played a lot of games for Newcastle and if they were stalling on a new contract we had a great opportunity to get him in.
“The offer from Villa was too good for Newcastle to turn down and James is worth every penny of the fee.
“I think he is doing very well for us. He conjured up something from nothing for the second goal against Blackburn Rovers on Wednesday. It was fantastic.
“James working hard for a football team becomes second nature to him as it does with the likes of Ashley Young.
“He has good energy, great determination, good skill and will definitely improve. I have no doubts about James. As a character he is top class.
“It says a lot for James that after telling him there were offers on the table for him he still wanted to play for Newcastle in their Carling Cup game against Coventry and he was brilliant.”
