Saha joined the Black Cats this week on a one-year deal after he was released by Tottenham in May and the forward has already declared himself fit for the season opener against Arsenal tomorrow [Saturday].
The 34-year-old has been troubled with injuries during his career but O'Neill believes the former Everton, Manchester United and Fulham striker can still do a job in the north east.
O'Neill said: "His appetite for the game is fine. In truth there's so many games hopefully he would play in but I'm not expecting miracles from him.
"I'm not expecting him to play every single game. That would be an enormous ask for him, but in the course of time I think he can help us.
"In the last season he played a while for Everton and played some for Tottenham Hotspur and perhaps maybe he thought with family, moving back to France that was it.
"Perhaps maybe he thought about playing in the French league, but he's prepared for one more season. I asked him the other day and he said: 'Everyone always has a point to prove' so I think he's ready to do well."
Saha is available for the first game of the season and could feature up front as fellow striker Stephane Sessegnon is an injury doubt after he picked up an ankle injury in training.
However, despite signing Saha, O'Neill is still keen to bolster his frontline and has been linked with Wolves' centre-forward Stephen Fletcher.
"We've been making inroads into trying to get some players," O'Neill said.
"Of course it's difficult because if you want a player and you think they're good enough to play in the Premier League the clubs that you're wanting these players from naturally don't want their players to leave. Maybe that's been the difficulty.
"In an ideal world I would have liked to have had the number of players that we're looking for in at this minute but it hasn't been possible.
"We have to improve our goal ratio. That's obvious to everyone. I'm not so sure in the course of time that you can have too many players who can score goals at a football club.
"Despite Saha coming in we're hoping to still strengthen and we want to do because it's a long season. Come the first of September you know that's it then for four months. Those four months are pretty defining.
"I knew it was going to be difficult but I'm expecting players to be arriving in the next 10 or 11 days."
Sunderland will make the trip to the Emirates knowing Arsenal will be without striker Robin van Persie, who completed his £24million move to Manchester United today.
But O'Neill does not underestimate the Gunners, who have signed Olivier Giroud and Lukas Podolski in a bid to offset the departure of the Dutch international.
"It's something maybe that has been expected since the player [Van Persie] made the announcement that he wasn't going to sign a new contract," he said.
"It will be disappointing for Arsenal. He's a fantastic player, one of the top four or five players or strikers in the world, so to lose a player of that calibre is exceptionally disappointing.
"But they've made inroads themselves and been able to capture a number of very good players so I think they'll be as equipped as they possibly can be to withstand the loss of that player."