The English born midfielder is highly thought of at Villa Park and by Irish coaching staff but is currently undecided on where his international future lies
There was no place for Grealish in O'Neill's 36-man provisional squad for upcoming international games against Oman and Georgia in September.
The Aston Villa midfielder, who was born in England, has featured for Ireland at youth level, most recently playing for Noel King's Under-21 team, but O'Neill says that the 18-year-old wants to "take a little bit of time" to consider his options.
"I spoke to his father, I spoke to Jack and he's a young kid coming through with a lot of potential and I think they just want to take a little bit of time," O'Neill told reporters.
"He's felt comfortable playing underage level but it's a totally different thing committing at senior level.
"It was a decent conversation and I think I'll just leave it at that at the moment."
With O'Neill's assistant Roy Keane in place at Villa Park as assistant manager to Paul Lambert, Ireland have an influential figure in place to possibly persuade Grealish to commit to the Football Association of Ireland (FAI) but the former Celtic and Aston Villa boss wants the player to come to his own decision, free of pressure.
"I really do not want to be pressurising. I would like people to come to their own decision," explained the Derry native. "I'm sure if Roy sticks on the assistant manager's head with us, he would like him. He has been impressed by him.
"But I don't think this puts Roy in an awkward position. I think obviously he will do his best but I want the decision to come from the players themselves."