The 23-year-old has impressed for Villa this season and scored two goals at Everton last weekend.
O’Neill said: “You talk about Ronaldo and Messi. Is Young in that company? Yes. I’ve just put him in it.
“This is my opinion. I look at players, I see a lot of games in Europe. I watch a lot of football and you see a lot of players playing the game who are very functional.
“Some are decent, some are more than decent and some are very good.
“And then you have a few players who are absolutely exceptional and Ashley Young is absolutely exceptional.
“I think he’s a world-class performer, I really do. I don’t use that too often but he’s absolutely class.
“And he’s far from reached his peak. Look at other top quality players — players who are 22 or 23 and absolutely brilliant like Ronaldo and Messi and ask how they can improve — but they do.
“They just get better. They see the game differently from how they might have done a few years earlier.”
O’Neill added: “The speed of his improvement would have surprised a lot of people but the one least surprised of all would be himself.
“He’s developed enormously in two seasons — surpassing all expectations.
“I think he’s been given great encouragement here at the football club to attack.
“Of course he’s going to lose the ball a couple of times. And if you lose the ball three times in succession you may be a bit weary.
“But that’s one of the things about him. Not only has he got physical courage but he’s got moral courage. He wants to get at them again. He’s a proper player.
“Could you name two dozen players in the world who could have scored that second goal against Everton? I can’t.
“I notice teams now, home or away, the minute he picks the ball up there is double cover. He’s a genuine threat and teams know that.”