McKenna shocked the football world last month when he decided to walk away from the Blues to spend more time with his family after guiding Town back to the Premier League, his third promotion in his four full seasons in Suffolk.
Kieran McKenna decided to leave Ipswich Town to spend more time with his family (Image: Steve Waller)
"I was slightly surprised by Kieran McKenna leaving," Mills told Snabbare.com.
"Needing a break already was a bit strange. I don't think anybody saw that coming unless there's something else in the wings.
"But I think Gary O'Neil will come in and do a decent job."
O'Neil has kept both Bournemouth and Wolves in the top tier, and now takes aim at doing just that with Town in 2026/27 - something even McKenna couldn't do in his one season in the Premier League.
And former England international Mills believes O'Neil can be successful at Portman Road.
Gary O'Neil has twice kept clubs in the top tier (Image: PA)
"A lot of clubs now have a remit for the style of manager they want," Mills continued.
"Gary O'Neil has done well in the past and is probably in a similar mould to Kieran McKenna.
"He wants to play in a similar way and isn't going to change too much, so I think it's a good move for both.
"It's a good move for Ipswich. They aren't going to go out and get a world-class manager with a high profile and pay that salary because that's not how they do business.
"They're a well-run club. So yeah, I think it's a good fit for Ipswich."