"I felt that something would happen with some of our top players," said O'Neill.
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Celtic remains active in the transfer market to replace departing players while managing external interest in key starters.
"I was hoping as each day went past that there wouldn't be any serious interest. But that was never going to happen," said O'Neill.
The Glasgow club is working on potential incoming transfers to bolster the squad before the deadline.
"But we need players in anyway. And we're on the hunt for that.
We're getting close. I don't know how close is close, but we are definitely getting close," said O'Neill.
Former Celtic forward Chris Sutton publicly criticized the potential move, questioning the logic of leaving a European-competing side for a second-tier English team.
"If Engels wants to go there right now it would be a lack of ambition for me when they are in the Championship.
I know West Ham will pay big money, but you can't go there with the assumption they will go straight back up to the Premier League," said Sutton.
The former striker highlighted the physical and competitive challenges of the second division in English football.
"The Championship is a notoriously tough division to get out of and Engels should be aiming his sights at the top tier and competing in Europe - not battling for promotion.
It would be a strange one, but it does look like he's going, which will leave Celtic looking even lighter in midfield," said Sutton.
Potts made 22 Premier League appearances last season for West Ham and previously completed a loan spell at Portsmouth.
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At Club Brugge, the English midfielder is expected to replace Raphaël Onyedika, who is finalizing a transfer to Eintracht Frankfurt.
