France won 2-0 on a wet night, with Olivier Giroud and Nabil Fekir scoring the goals in the first half, and Ireland struggled to get near the ball at the Stade de France.
“They are very strong, indivdually they have got a lot talent in their team. I think they’re one of the favourites for the World Cup,” said O’Neill.
It was the first meeting of the sides since Antoine Griezmann’s goals gave hosts France a 2-1 win in Lyon in the round of 16 of the last European Championship.
Only three France players in Monday’s game — Adil Rami, Giroud and Blaise Matuidi — also started in that match at Euro 2016.
“I don’t want to put pressure on their coach, but I think they have improved in the last two years and they are perhaps a better side than they were two years ago,” O’Neill added.
France begin their World Cup campaign against Australia in the Russian city of Kazan on June 16, before also facing Peru and Denmark in Group C.
O’Neill’s side missed out on qualifying for a place in Russia after losing to the Danes in a play-off.
That means they are building towards the start of the new UEFA Nations League, with their next competitive outing against Wales in Cardiff on September 6.
They finish this season with one more friendly against the United States in Dublin on Saturday, when they will hope to make more of an impact than they could against the French.
“I thought we were naturally second best this evening against a world-class team and that is possibly to be expected. It was really tough for us,” admitted O’Neill, whose starting goalkeeper was Colin Doyle of English third-tier side Bradford City.
Graham Burke of League of Ireland side Shamrock Rovers also came off the bench in the second half.
“I am really pleased we took this fixture on because if you’re trying to aspire to something, then the quality the French possess is something you’d want.
“We’re a long way off from that but the players can learn from it.”
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