Speaking in a new UTV documentary, he claims the FAI is “realistic” and only goes after players from the Catholic community.
In the documentary, due to be aired on Tuesday, Mr O’Neill says: “The FAI have a right to choose any player, but they only approach one side of the community to play.
“I think there’s a sense of realism that they feel that only one side of the community will make that decision.”
A Game of Two Halves is the next episode of UTV’s Up Close current affairs programme and sees former Sky News editor Ian Woods investigating the landscape of football across the island.
In response to Mr O’Neill’s comments, the FAI said: “The Football Association of Ireland is committed to maintaining and developing our excellent relationship with the Irish Football Association and we will continue to work together for the betterment of the game for every player on this island.”
The hour-long documentary sees Mr Woods take a look at the history of the two footballing bodies on the island, as well as charting the highs and lows of the boys in green and supporters over the years.
The show also explores why some young players from here choose to play for the Republic despite efforts to make Northern Irish football more inclusive and asks whether a unique Northern Ireland national anthem would help unite players and fans.
Mr Woods speaks to a range of key figures for the programme, including former international managers Michael O’Neill and Martin O’Neill, as well as players past and present, including Mark Sykes, who gives his first TV interview since switching to play for the Republic of Ireland.
He also chats to Northern Ireland stars Niall McGinn and Billy Hamilton, as well as the head of the Irish Football Association (IFA) Patrick Nelson, former Ulster and Ireland rugby captain Rory Best, actor and fan Jimmy Nesbitt and former First Minister Arlene Foster.
Martin O’Neill, who captained Northern Ireland but went on to become the manager of the Republic, tells the show the IFA is at a disadvantage because of the rules around eligibility.
He says: “You certainly feel the North is handicapped in many ways by the rules as they stand. Maybe they should be looked at again, I don’t know.”
The show also takes a look at how Northern Ireland fans ditched their red, white and blue colours and became a green and white army, tackling sectarianism and winning awards for their behaviour.
Jim Rainey, who was awarded an MBE for his cross-community work, says: “During the Troubles, I think Northern Ireland fans saw the team as an expression of their Britishness. We had to replace the old songs.”
Northern Ireland women’s captain Marissa Callaghan, who grew up supporting Celtic and Republic of Ireland, adds things have changed since the dark days of conflict.
She tells the show: “We all feel welcome. There’s no better place than Windsor Park. I’m a massive supporter of the men. What they did at Euro 16 inspired a nation and inspired a nation of new supporters.”
Documentary maker Mr Woods said he wanted to examine why football split after partition when the other major sports did not.
He added: “Given that rugby, cricket, boxing hockey and golf all survived partition in 1921, I decided to look into why it wasn’t the case in football and, more importantly, look at the consequences that are felt to this day.
“There are a wide range of views expressed in the programme that viewers will agree with and some that they will vehemently reject, but at least we are talking about issues which are still often seen as taboo. I’d like to thank everyone who took part in the programme.”