The 49-year-old was speaking at the announcement of the shortlists for the 12 categories in the Bord Gais Energy Irish Book Awards 2012, in which his collection of short stories 'Where Have You Been' was nominated alongside Mr Banville's 'Ancient Light' for the Eason Irish Novel of the Year.
"To be on the same list as some of these authors, including John Banville, is a fantastic honour because John was so important to me when I started out writing. Just to be in the same shortlist as a hero like John for one night, it feels like I have already won. It's a bit like Sallynoggin FC making it to the Cup Final," Mr O'Connor told the Irish Independent.
Also nominated for the book of the year award were 'Astray' by Emma Donoghue; 'Dark Lies The Island' by Kevin Barry ; 'The Light of Amsterdam' by David Park; and 'Hawthorn & Child' by Keith Ridgeway.
Last year there was some controversy when TV cook Rachel Allen was a surprise winner of the non-fiction section with 'Easy Meals', beating Joe Duffy's autobiography and two best-selling books on Ireland's financial crisis by Matt Cooper and Simon Carswell.
This year Ms Allen goes head-to-head with Catherine Fulvio, Donal Skehan and three others in the new cookbook category.
Cecelia Ahern's 'One Hundred Names' will fight it out for the fiction title with the late Maeve Binchy's 'A Week in Winter' and works by Kathleen MacMahon and Sinead Moriarty, among others.
Irish political and sporting figures' memoirs in the non-fiction and sport categories include those by former president Mary Robinson, senator David Norris, sporting commentator Jimmy Magee and boxer Katie Taylor.
Irish Independent columnist David McWilliams's book 'The Good Room' was also nominated for the non-fiction book of the year. The public can vote at www.irishbookawards.ie until midnight on November 18.