O'Neill installed Lafferty as his first-choice centre-forward when he took over at the start of last year, but has not been impressed by the Palermo player's output.
In five qualifiers he has managed no goals, two yellow cards and one sending-off - against Portugal on Friday.
"The reality is that he misses this game suspended and I'd say he'll miss the next two as well, that wouldn't surprise me," said O'Neill.
"We will address it after that. I had a good conversation with Kyle and he was very apologetic and recognises he has let his team-mates down.
"I would never say I would wash my hands of him or anything like that because he is still a player who can potentially be a big asset to the squad, but at this minute in time he is not giving us very much and he knows that.
"After quite a good start to the campaign he has contributed very little and he knows he won't have contributed very much in the second half of the campaign.
"He knows he needs to address that, not only for me but for the lads he plays alongside as well."
Ahead of Tuesday's meeting with Luxembourg, O'Neill is preparing to hand Aaron Hughes his 88th cap - and he hopes the Fulham man can be persuaded to keep going for another 12 games.
"The 100-cap mark is a great carrot," he added.
"Given the service he has offered to Northern Ireland there's not a finer person to be the first outfield player to achieve that. He's still so vitally important to us."