Villa were on course for a top four place in the Premier League in early March before an end of season fade-out saw them eventually finish sixth.
O'Neill has already lost the services of the retired central defender Martin Laursen and midfielder Gareth Barry following his £12 million move to Manchester City.
Villa have been linked with the likes of Newcastle striker Michael Owen and Tottenham winger David Bentley as possible signings.
Central defender Davies said: "I expect a lot of ins. We had one of the squads that has used the least players again.
"I am sure the gaffer will want to be building the squad rather than to be breaking it apart. It will be an interesting summer.
"Last summer I think we signed something like six players and I can imagine something along similar lines.
"If people see the progression we have made as a team, and we get the right names here, they could help push us into the top four."
Davies refuses to blame the small size of the Villa squad for their poor finale to the season.
He said: "The size of the squad can be talked about but we got to February and were still flying.
"People can say we then petered out but we were out of the UEFA Cup then and had no more of those games to worry about.
"We were playing Saturday to Saturday. We just didn't keep our form up.
"Obviously, if you have a bigger squad, you can freshen things up but the players who were there never really complained about it and kept going."