The north London club have struggled with their managerial pursuit since they sacked Jose Mourinho more than two months ago.
Several managers have rebuffed their approaches and their indecisive nature has seen them abandon deals for Paulo Fonseca and Gennaro Gattuso this month.
O’Hara feels Levy is being unrealistic with his managerial targets and highlighted the way they tried and failed to convince Antonio Conte to take charge of the club this summer.
He stressed that top managers will be circumspect about taking up the Spurs job due to the speculation surrounding Harry Kane and the club’s inability to compete at the top end of the transfer market.
The former Spurs star reminded Levy that the club are no longer Champions League finalists, but a team who have dropped down to the third tier European competition in the Europa Conference League.
O’Hara said on talkSPORT: “I think the problem that Daniel Levy is finding that he is unrealistic in terms of manager that he can get.
“Everyone wanted Conte and there was obviously talk about him and sure that would have been a great appointment.
“But you have got to pay for him, which was going to cost big money and you have got to back him in the market because at the end of the day Harry Kane is off.
“You can see that he is going.”
He added: “Managers are looking at it like Conte and the Sevilla manager who had a great season got them to the Champions League.
“They are going to look at it and go, look at the squad without Harry Kane, ain’t that great and am I going to get money? Are you going to back me and give me £150m to £200m, which they probably need to really rebuild that team? No.
“We have had a big fall from grace, we are in the Europa Conference League.
“We are not the Spurs that were playing Liverpool in the Champions League final a few seasons ago.
“We are not that team and we are not that club.”
After several public relations disasters, Spurs are desperate to keep their managerial pursuit under wraps and away from the public glare.
