The 20-year-old has declared his intention to play for the country of his birth, despite having featured for Ireland at various youth levels up to the Under-21s.
O'Neill accepts the decision made by Grealish and says he never went overboard to try to sway him to represent his own team.
"I never prostituted myself in any way, shape or form trying to get Jack Grealish," he told reporters.
"I never chased him at all and I think Jack Grealish and his father would readily admit that. In fact, actually I was accused of the other thing, of not chasing it up.
"Jack Grealish had a decision to make. He was born in England, his father was born in England and therefore he made a decision to play in England, so that is it.
"It is absolutely and utterly his and his father's decision to do that, so it is fine. Jack has really good talent - a really fine player and of course it is a disappointment to lose out on that, but hopefully it's not the end of the world."
Republic of Ireland are preparing for a crucial Euro 2016 qualification double-header, with games against Germany and Poland set to decide their fate in Group D.
O'Neill's men are four points clear of fourth-placed Scotland in Group D - a win will guarantee them a place in the play-offs the very least, with automatic qualifcation still within reach too.