Villa were undone by a Zavon Hines goal in stoppage time, after referee Steve Bennett had shown a red card to Villa defender Habib Beye in the second half.
Mark Noble had put the Hammers in front from the penalty spot and Ashley Young equalised with a cross that looped all the way in over the head of Robert Green, with Young having missed an earlier spot-kick.
The Villa boss was unhappy with the defeat, after what has been a tough spell of fixtures for the Birmingham outfit.
"Well obviously we're disappointed - disappointed to have lost the game," he told Sky Sports.
"I don't think on the balance of play that we deserved to, but we were beaten and that happens.
"I thought that we were in the ascendency in the first half and we had a number of shots on goal. The goalkeeper has made one particularly great save.
"I thought that we were doing okay. We conceded the goal just before half-time and they came roaring back in the second half.
Spell"It has been a very difficult spell for us, three Premiership games on the trot away from home with a rearranged fixture.
"In fact we've had four considering we also played in the Carling Cup as well so it's been particularly difficult.
"But having said this if we had not been beaten here tonight we would as least have taken something out of the game."
Villa missed the chance to move into the top four and stay in seventh place with 18 points from 11 games, and O'Neill said his side should have got something from the game.
"I thought that we might go on to win the game so I am obviously disappointed that we have lost all three points," he added
"It can happen, it can happen in the game (last minute goal). They had a chance in the penalty box and the fellow has eked out that opportunity and scored the goal and those things can happen in the game.
"We had a number of chances in the game to have gone and taken the match but it wasn't to be."