Graham was booed when he played for his former club Swansea City at the Stadium of Light on Tuesday night but O'Neill has revealed that he is impressed with the 27-year-old's character after he went ahead and signed a deal with the Black Cats.
O'Neill told reporters: "He wants to do well and he wants to go and prove himself. The fact that reaction the other evening didn't put him off coming here says something about the lad.
"I think he has felt the need to prove himself during his career, that's probably what has kept him going.
"He has got some experience as he scored goals last season and I think he wants to prove a point. All those attributes, I find pretty nice."
Graham has been named in Sunderland's squad for their match with Reading on Saturday.