The former Manchester United captain accepted Villa manager Paul Lambert's request to become his deputy during the close-season, filling the role left by the dismissed Ian Culverhouse.
Keane was already O'Neill's right-hand man in the international setup with Ireland, though the former Celtic boss insisted he was happy to share the 43-year-old's services.
But Keane officially left his post as Lambert's assistant on Friday, citing his struggles with combining the two jobs.
And O'Neill acknowledged that Keane needs more time away from the game.
O'Neill told FAI TV: "He didn't have any holiday. He went straight from international duty with us in America to the job at Aston Villa and eventually those things catch up with you, one side of Christmas or the other.
"Roy being the perfectionist he is wanted to give everything to every single cause, but I think maybe a bit of family time now is perhaps something which is missing.
"We had a big discussion about the issue at the last international get-together. He was more concerned about having that full commitment to Villa and to ourselves.
"I said in the past and it's worth reiterating; I never had a problem with his commitment to the Republic of Ireland.
"Everything I was hoping he would bring to the table - commitment, enthusiasm, the strong desire we know he possesses - haven't been a problem.
"I am delighted the Republic of Ireland have been his first choice."
