O'Neill, recently appointed Ireland's new manager, was sacked by Sunderland in March after a 16-month spell in charge and replaced by the controversial Di Canio, who helped them avoid relegation.
The Italian bemoaned a lack of fitness in the squad and brought in 12 new players during the close season, but he was dismissed in September after a total of three wins from 13 games in charge and the club rooted to the bottom of the table.
When asked if he was disappointed by Di Canio's comments, the former Celtic and Aston Villa manager, who was appointed by Ireland on Tuesday to his first managerial role since leaving the Stadium of Light, did not hold back.
"Paolo Di Canio? That managerial charlatan - absolutely, yes," the 61-year-old said in comments carried by British media on Monday.
"Paolo stepped in there and basically, as weeks ran on, he ran out of excuses. I had a wry smile to myself.
"If you've ever seen Aston Villa play, you'll see the one thing I pride myself on is teams being fit."
Di Canio was a surprise appointment by Sunderland after one successful stint where he helped Swindon Town gain promotion from the English fourth tier.
His abrasive style and desire for strict discipline from his Premier League players proved unpopular, with many exiled from the first team for not meeting his standards.
A training ground bust-up led to the squad demanding club owner Ellis Short remove him, according to reports. .
O'Neill said Di Canio had been inconsistent with his criticism of the squad's fitness.
"What you'll find interesting is that when he started the team wasn't fit for the Chelsea game. Then the following week when he won at Newcastle, not being fit wasn't mentioned," the former Nottingham Forest player added.
"Then about two weeks later they got mauled (6-1) by Aston Villa, someone asked him about the fitness. Suddenly, he didn't know where to go. Because the team, as it progresses, should be getting more fit.
"And then, at the start of the season, when he lost by a late goal at Southampton, he was asked about the fitness regime, that he was going to have them the fittest team in the league.
"Suddenly, the fitness wasn't for that game but for Christmas, when the winter months set in. You know, I did have a wry smile at that one."
Di Canio's replacement at Sunderland, Uruguayan Gus Poyet, has endured a bright start in charge and helped the 'Black Cats' to a surprise 1-0 win over big spending Manchester City on Sunday. They still sit in 19th of 20 teams however.
O'Neill, who appointed a similarly abrasive character in ex-Manchester United midfielder Roy Keane as his assistant, takes charge of Ireland for the first time on Friday at home to Latvia in a friendly.
He remains hurt at being dismissed by the club he supported in his youth.
"I was very disappointed at the outcome," O'Neill said. "I think I would have garnered the five points necessary to have stayed up and (had) the chance maybe to have changed the side."
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