Barry's place in central midfield could be on the line with both Steven Gerrard and Frank Lampard in form and available to England coach Capello for the upcoming World Cup qualifiers with Kazakhstan and Belarus. But O'Neill believes Barry is playing "better than ever" and has praised the 27-year-old's professionalism in the wake of the summer saga over his proposed, and ultimately aborted, move to Liverpool.
"Gareth, to his great credit, has put aside the disappointment of not joining Liverpool during the last transfer window," O'Neill said. "He has put his head down and got on with things and he has been excellent for us. My own view is that Gareth is now actually playing better than ever.
". But that's not to say he can't do both roles."
If Capello does opt for a Lampard/Gerrard combination, Barry could be deployed on the left of a four-man midfield in which Theo Walcott is certain to occupy the right-sided berth following his hat-trick in the 4-1 win over Croatia in Zagreb last month. Great things are expected of the Arsenal winger but England captain John Terry has warned against burdening the teenager with too much pressure.
"The lads all said that Theo came out of his shell a bit on the last trip with England," Terry told The Sun newspaper. "But let's not put too much pressure on him. He is an exciting talent and a really good player for the future and for this campaign.
"But we must not start saying it is all down to him and that he is the only way forward. We have the likes of Theo, Wayne Rooney and (currently injured) Joe Cole. Let's tell them all to play their normal game like they are back in the playground."
The row over Capello's decision to leave Michael Owen out of his latest squad continues to rumble on meanwhile with the former Liverpool manager Roy Evans the latest to voice surprise over the Italian's apparent disregard for the striker.
Owen has scored three times in his last four outings for Newcastle and, with 40 international strikes, has been England's most reliable source of important goals in recent years. However, Capello has yet to be convinced Owen can add anything to his squad, to the bewilderment of the likes of Evans, now assistant manager of Wales.
"The last few years have been a bit of struggle for Michael with injuries but he has come back and he looks in great shape," Evans said. "."
Evans added: "It's a results industry and sometimes you need a player who can dig a goal out of nothing and Michael has got that. He has got a track record at international level, he has scored goals, I just can't see why he is not in that squad even if it is just to be on the bench."