The 27-year-old returned to the starting line-up at Coventry on Saturday after his latest injury lay-off, but manager Tony Mowbray asked stand-in Bates to lead the side out once again.
O'Neil told the Evening Gazette: "Matty was the skipper and I have got no problem with that at all. It's entirely up to the gaffer and whatever he decides, I am happy to go with.
"He thinks the lads have been doing well in the last few games and that Batesy has been doing well in particular.
"He's only a young lad, but Batesy is a leader out there. If the gaffer thinks that is the best for the team and best for the club, then I'm more than happy to go along with that.
"I will just get on with it and work as hard as I can and play as well as I can for the club."
Source: PA
Source: PA