O'Neill has spoken to Villa manager Paul Lambert about how the joint position would work and he believes the former Manchester United skipper will make the most of the dual role.
"My view is if it doesn't impinge on the job here with Ireland, then in actual fact it will end up being good for him,” O'Neill told the Irish Independent.
"I know that if we couldn't have made it work, he wouldn't have taken the job in the first place.
"If his commitments to us - both on the commercial side and certainly from my viewpoint in terms of the time working with players - is not impinged at all, then I'm happy for it to go ahead, genuinely happy.
"Villa have agreed to give him all that time with us and therefore I don't really have a problem with it. I spoke with Paul to see how he felt it was going to work.
"He said that he gives the players, the senior players who are not involved at international level, a lot of time off anyway during that time (international breaks) and even if they did come back for a day or two, they could cope with that."
Watch Aston Villa face Liverpool at Anfield on September 13, one of the initial tranche of Premier League matches to be shown live on Sky.