"There are a number of teams who are looking to take Lee on loan," O'Neill said. "John Gregory has enquired about him and Crystal Palace have maintained an interest.
"Lee played for the reserves on Monday night and we will see how fit he is because it is all about games with him. If he wants to give himself a chance of getting into the first team, then he'll want to get himself as fit as possible.
"I wasn't the one who instigated the possibility of him going out on loan. It seemed as if his agent wanted that. But, even so, I am not in disagreement with him because he can go, wherever that may be, and get games."
Rangers have already signed Jimmy Smith on loan from Chelsea.