Powell limped off in the second half of a 1-1 draw with Blackburn Rovers suffering a jarred ankle on Saturday, having played a key role in the first 55 minutes.
Fletcher (groin) has been missing since falling awkwardly in a home defeat to Bournemouth on January 2, having been nursed through a few games with a nasty knee injury over the previous six weeks.
O’Neill said: “Nick is fine and Steven Fletcher is available again. Those are obviously boosts for us.
“I thought Nick was very good for us on Saturday. We missed him when he went off at that period of the game.
“Hopefully we have Fletch back fit and injury free now. He’s perhaps come back maybe a little early before and not moving as freely as we would like.
“The initial knee injury has healed completely and the recent groin injury has healed as well.
“Hopefully he can get a run of games now and he can stay injury free.”
Stoke are expected to freshen up the starting XI after encountering a sapping pitch at Blackburn.
O’Neill said: “We have to be mindful of Joe (Allen). It’s still relatively early in his return. He’s not had a three game week when he’s started three and this week is excessive because the Watford game has been brought forward as well.
“We look at those scenarios. The pitch was demanding on Saturday and we’re probably into a stage where pitches are going to be demanding again for the next six to eight weeks in particular.
“Those are all factors when we come to pick a team for this game – and the nature of this game as well.”
James McClean has returned from a club suspension for an alleged breach of Covid 19 rules, having been fined a week’s wages.
He is in the squad too.
“James is available,” said O’Neill. “He obviously missed Saturday’s game. He realised that what he did was not within the club’s guidelines for how players should behave. We’ve dealt with that, he’s accepted his punishment and we move on from that.”