But the former British & Irish Lions skipper made his first appearance for five months for Munster A on Tuesday, coming through 40 minutes unscathed.
As a result, O'Connell is hopeful he will play a part in Munster's Heineken Cup campaign with a trip to Harlequins on the horizon early next month.
And Penney believes there were encouraging signs in O'Connell's comeback appearance.
"I'm really pleased for him that he got through 40 minutes and looked vigorous," Penney told the Limerick Leader.
"I was watching him closely around the contact area, the areas you need to be robust and he could have been potentially compromised but he didn't look like he was flinching at any time.
"He looks like he is on the mend and he is on track for a little bit more footie in the next week or so."
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