Villa had taken the lead in the third minute through Gabriel Agbonlahor before Christopher Samba had scored an equaliser. Rovers were then reduced to 10-men when Vince Grella was sent-off for two bookable offences.
Dunn's penalty came with a minute left on the clock after Richard Dunne had handballed. Although O'Neill questioned whether the incident was deliberate on Dunne's part.
He said: "It's something to do with a new set of directives that if your arm is in an unnatural position you can be adjudged to have handled the ball.
"But if he had used his head we would probably have won a free-kick because the striker's leg was high.
"When we got the early start I was hoping to get the ball down and play, but it's difficult. Blackburn played very, very strongly as I expected them to do."