The Portuguese winger's injury comes as the West Midlands club, ninth in the Premier League with 41 points from 28 matches, are pushing for a European spot.
Neto has three goals and 11 assists in 23 appearances across all competitions this season.
"Neto is looking like it's probably done for the season, and maybe back towards the very end of it," O'Neil told the club's website after a shock 3-2 home loss to Championship side Coventry City in the quarter-finals of the FA Cup.
Wolves are also dealing with injury problems to forwards Matheus Cunha and Hwang Hee-Chan.
Wolves next visit fourth-placed Aston Villa on March 30th, followed by a trip to lowly Burnley on April 2nd.
"Cunha is looking like he'll be around it by Villa... Channy (Hwang) is probably six to seven weeks in total from when he did it, so he's still got a fair few to go," O'Neil said.
"But we need to keep working to find solutions from what we have."
