The 30-year-old was officially released by West Ham at the end of last season, just over two years after completing a £5m move from Middlesbrough.
O'Neil has insisted that he was always confident of agreeing fresh terms with Hammers boss Sam Allardyce, despite a delay in proceedings while the midfielder was a free agent during the close season.
He told Sky Sports News: "Everything's been agreed. I didn't need a medical, obviously they know me quite well.
"All the terms are agreed and everyone's happy, so I'll just sign Monday morning. It took a little while. With everyone being on holiday stuff drags out, but we got there in the end.
"That's the way it comes out in the press [on being released], slightly differently to how it is. We were always sorting it out and I was confident I would end up there."
During West Ham's successful return to the Premier League last season O'Neil featured largely as a substitute, making 27 appearances in all competitions.