Milner applauds Villa's squad depth
Villa are currently fourth in the Premier League table after a run
of three successive victories, which included away wins over
Manchester United and Sunderland.
They looked well place to challenge for a Champions League spot last term before a miserable run of form after the turn of the year saw them slip out of contention.
But Milner, who has switched from his usual wide role to central midfield in recent weeks with great success, believes O'Neill now has a much stronger squad at his disposal.
Villa, Manchester City and Tottenham all have realistic ambitions of breaking the established order in the top flight, with Liverpool looking particularly vulnerable and Arsenal hit by injuries and showing inconsistency.
"We were in a great position this time last year and we know what happened, but it's about learning from that and I think we have done," the England international said.
"We had the quality, but now the squad has a bit more depth.
"If you look at our bench and see players like Carew, Sidwell and Reo-Coker there, it shows there is fantastic competition for places and that's exactly what we need.
"They're all pushing for places, but everyone is contributing massively.
"It's great having Emile Heskey back who is showing what a top striker he is, while Richard Dunne has been brilliant since he came in."
Milner scored a stunning goal in the victory over the Black Cats at the Stadium of Light and took greater pleasure from defeating Steve Bruce's side than their shock success against the champions.
He added: "Sunderland wasn't our best performance by any means, but the result is probably even more satisfying than winning at Old Trafford and hopefully we can keep it going.
"This is a vital period because you look at the table before Christmas and then afterwards and a lot can change."