Elliott scored two first-half goals and then helped to keep Wimbledon at bay when they launched a second-half revival.
"Matt did great," O'Neill, the Leicester manager, said. "He has been sensational for us. I think he has been the bargain buy of the season, but don't try telling him he is a bargain."
Elliott twice beat the Dons defence to bundle home Muzzy Izzet's far- post corners, which had been won by the determination of Emile Heskey.
The 19-year-old striker also set up Leicester's third goal, tussling for and winning the ball on the byline. His pull-back was dispatched by Mark Robins with a neat overhead kick.
However, Heskey's caution six minutes from time will earn him a club fine "He had a great match but he must not take swipes at people," O'Neill said. "He gets himself suspended for a couple of games and that is no good to us. He has great talent but he still has a lot to learn."
Leicester have beaten Wimbledon twice in the Premiership and drawn 0- 0 in the first leg of the Coca Cola Cup semi-final at Filbert Street in the last six weeks. They now play Wimbledon for a fourth time in the second leg at Selhurst Park a week tomorrow. Only Dean Holdsworth's spectacular volley made a dent in Leicester's defence on Saturday, but they know that the Dons will field a stronger team next time.
O'Neill has not forgotten but he has forgiven the referee Mike Reed, who mistakenly gave Chelsea the penalty that put Leicester out of the FA Cup. "The matter is closed as far as I am concerned," he said. "If Reed made an honest decision, so be it."
Goals: Ellliott (17) 0-1; Elliott (27) 0-2; Robins (32) 0-3; Holdsworth (66) 1-3.
Wimbledon: Sullivan; Cunningham, Kimble, Blackwell, Earle, Holdsworth, Perry, Goodman (Castledine, 83), Ardley, Clarke (Harford, 45), Fear. Substitutes not used: McAllister, Jupp, Heald (gk).
Leicester City: Poole; Grayson, Walsh, Izzet, Lennon, Taylor (Lawrence, 70), Heskey, Robins, Prior, Elliott, Guppy. Substitutes not used: Watts, Wilson, Campbell, Hyde (gk).
Bookings: Leicester Heskey, Prior.
Referee: G Ashby (Worcester).
Man of the match: Elliott.
Attendance: 11,487.Reuse content