O’Neill - who also revealed he had turned down the chance to succeed Gordon Strachan as Scotland manager because he didn’t feel it was the right time - was speaking to to Si Ferry’s Open Goal podcast.
The 49-year-old, who led Northern Ireland to the knockout stages of Euro 2016 and wins over the Ukraine and a narrow 1-0 defeat to then world champions Germany, explained how his move to Easter Road came about.
“I had a difficult last year [at Dundee United],” he said.
“I initially signed a three-year contract and in my last year, I started the season, scored five goals in six games then Jim McLean never played me the rest of the season. “Never played me in a single game - for a single minute. He wanted me to sign a contract and I’d said, ‘look, I’m going back to England, I want to go back to England’ and he basically put me out the game for that period of time.
“It was different then, there was no Bosman [ruling], so United held my registration. “I went to Everton on trial, I went to Middlesbrough, couldn’t agree a deal. English clubs didn’t like going to the tribunal system with Scottish teams at the time, either.”
The Bosman ruling, which allowed players in the EU to move to another club at the end of a contract without a transfer fee being paid, was only introduced in 1995 - nearly two years after O’Neill was looking to depart Tannadice.
O’Neill continued: “So I went back to Dundee United, signed a contract from October until the end of the season and [McLean] played me in every game.
“My contractual situation was no different to the year before but he played me basically every game, then he retired and Ivan Golac came in and that was my opportunity to get away.
“Hibs came in and bought me in a tribunal for about £250,000 or something like that. If I’m being honest, at the time my preference was to try to go back to England. “The Premier League had just started, and you could see where the game in England was developing.
‘Three very happy years’
“But Hibs was great, I loved Hibs as a club, Hibs is a really good club to play for. I live in Edinburgh now, I regard it as my home city.
“When I look back at Hibs it was three very happy years I had there. “It was brilliant, we had a good team. “It wasn’t a young team but I played off the left, we had Kevin McAllister playing off the right, Keith Wright and Darren Jackson played up front, Jim Leighton in goal.
“Alex Miller was a really good manager. We had a bit of a love-hate relationship at times but he was a very, very good manager. “He was always criticised for being a little bit negative but I never found him that way at all. He was structured, but not negative.
“It makes me laugh when everyone - the media, managers, coaches - talk about the top six, you have to be in the top six.
“The three years I was at Hibs we finished third, fourth and fifth - and Alex was maligned for a lot of that, although we lost to Rangers in the League Cup final.
“One season, I think it was my second season, Rangers won the league, Motherwell pipped us to second, we were third and Celtic were fourth.
“Those are situations that you wouldn’t even envisage happening in Scottish football these days.
“But Hibs was a good place to play, Easter Road was a good place to play and the Hibs fans are great.”
Nearly becoming Hibs boss
O’Neill also revealed that, before he was appointed manager of the Northern Ireland national team, he thought he was in line for the top job at Easter Road.
“At one point, I thought I was going to be the next Hibs manager and it didn’t happen. I did speak to Hibs, but they opted to go down a different route. “There was talk about Dundee United at that time as well,” he recalled.
“I thought, from a career point of view, my next step would be to come and manage in the SPL, as it was then. I still had my house in Edinburgh, I knew Scottish football, I wanted to come back to it.
“There was a bit of talk of League One, even Preston was mentioned as a possible option as well.
“I was out of contract at Shamrock Rovers at the time and I didn’t think I would get the national job - there were people who had managed in the Premier League, and the Championship, who were in for that job as well.
“I was only 42 at the time so I was young to be an international manager. I didn’t envisage that I would be the Northern Ireland manager - that wasn’t part of the career plan - but when I went for the interview, they came and offered me the job and I thought, if I don’t take it now I might never get it.”