Collymore knows better than most the dilemma facing Barry having played at Anfield and worked under O'Neill during his time at Leicester City.
And Collymore says O'Neill could well persuade Barry to stay at Villa Park.
"Sad as it would be to see him go I don't think anyone would begrudge him leaving but Martin will do his very best and he's a fantastic man-manager," Collymore added.
Collymore played under O'Neill at Leicester City (Getty)
"If there's anyone who can get Gareth to stay in the current circumstances, it's him."
But Collymore admits the lure of playing regularly in the Champions League could tip things Liverpool's way.
"It's an amazing tournament and to fulfil your career you need to be playing in Europe year in, year out," he said.
"You're playing the likes of AC Milan, Barcelona and Real Madrid two or three times a season - that's quite irresistible."
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