Celtic's defeat to Glasgow rivals Rangers in the Old Firm derby last weekend proved to be the final straw for French manager Wilfried Nancy.
The ex-Columbus Crew boss departed Celtic Park on Monday, alongside director of football Paul Tisdale, having presided over six defeats in just eight matches.
Nancy was appointed only 34 days ago, replacing Brendan Rodgers in the dugout at Parkhead.
Martin O'Neill says Scottish Premiership title will now be 'a challenge'
Between Rodgers' exit and Nancy's arrival, veteran manager O'Neill had been installed on a temporary basis by the Celtic board and asked to steady the ship.
After a calamitous month for the Glaswegians, O'Neill has accepted the call once again to try and save the club's season after Nancy's position had become untenable.
Speaking in his first interview since re-appointment, O'Neill told talkSPORT he would only be in charge until the end of the season and has not yet had a conversation with Celtic Park chief Dermot Desmond about going for the Scottish Premiership title.
"It'll be very very difficult. We're behind. Rangers have caught up now as well too and so it will be difficult but it is a challenge for us," the European Cup winner said.
"I can't see [staying longer than necessary] for a start - I genuinely can't. I don't know whether I would have the energy and all that type of stuff. I'll just put everything into it now for these next couple of months and the same applies to me if I don't win football matches I'll be straight under pressure and that starts here at the weekend."
O'Neill was sympathetic towards the departing Nancy, who could only watch as his Celtic team surrendered a 1-0 lead against Rangers in last weekend's Old Firm clash, going on to lose 3-1 on home turf.
"I know in this day and age there's managers, the minute they step into a football club have to win immediately. That's very, very difficult to do. Someone who comes in doesn't know the players that well. Players have to learn what the manager wants to do. That takes a little bit of time and that's really unfortunate, but in this day and age it's instant results."
In terms of where it all went wrong for Nancy, O'Neill believes the players' confidence played a role in the team's record of two wins and six defeats.
"I genuinely don't know but I know that there were a couple of games that I saw where they had scored the second goal, when they've taken the lead, they could have put the games beyond the opposition and the opposition somewhere along the way get an equalising goal and then things happen, you lose a little bit of confidence.
"The same even last week in the Rangers game, Celtic dominated proceedings, scored, could easily have scored a second goal. The Rangers goalkeeper's made some really, really great saves. Rangers get back into it in the second half and then confidence drops almost immediately and that's what happens when you're not winning football games, players' confidence no matter how good they are seems to disintegrate."
Celtic trail league leaders Hearts by six points and sit level with Rangers on 38 for the campaign so far.
The Bhoys welcome Dundee United to Glasgow this weekend in what will be O'Neill's first game back in the dugout since relinquishing the post to Nancy over a month ago.
