Coleman was on the receiving end of a wild lunge from Neil Taylor 21 minutes from the end of Friday's otherwise unremarkable clash in Dublin, as Ireland lost top spot in Group D to Serbia.
The Everton defender's sickening injury was all too apparent and O'Neill's first thoughts were for the 28-year-old, who was taken to hospital.
"It's a bad break. He's a fantastic player and character. It's a major blow for the lad, his club and us," the Ireland boss told Sky Sports.
"Apparently it wasn't the best challenge in the world – I haven't seen it. He's gone to hospital. I saw his reaction immediately and it didn't look good. He was holding is leg up and it didn't look good.
Hope seamus Coleman gets better soon. Horrible tackle— Wayne Rooney (@WayneRooney) March 24, 2017
"We had a few things to overcome this week. We have a really great spirit.
"Seamus is a major blow – at the end of it all the most important thing is Seamus' health."
Horrific challange nah man get well soon seamus bro i know mentally he's the man to come back better stronger from this @Everton— Yannick Bolasie (@YannickBolasie) March 24, 2017