Neville, speaking in Singapore ahead of the opening of his Hotel Football project at Old Trafford, said the Dutchman was on track and that criticism was wide of the mark.
A frustrated Van Gaal this week issued a four-page dossier to combat claims United were playing a “long-ball” game, a move seen as a sign that the pressure was starting to tell.
“He’s quite clearly not cracked,” former defender Neville told AFP in an interview.
“He’s an experienced manager, he’s probably just got to the point where he thinks, ‘I’ve had enough, I’m going to bite back a little bit’.
“I didn’t see it as someone who’s cracking, personally. I thought it was something he won’t do again, on the other hand I didn’t think it was so bad.
“But I understand the reaction.”
Neville said United’s league position of third, and with an FA Cup fifth round tie this weekend, showed Van Gaal was on course for a “sensational” debut season after they finished seventh and trophyless last year.
– Rooney ‘never complains’ –
“I like what he’s done. A lot of people have been criticising him but he’s been pragmatic, he’s changed his style to suit,” Neville said.
“It’s not always been the best football in the world but then what Manchester United need this season is a Champions League finish and then hopefully an FA Cup run and maybe an FA Cup victory. That would be a sensational season.”
He added: “People have been critical because he’s not playing this way or that way (but) it takes time, he’s only been there seven months.”
Neville said he wanted to see former team-mate Wayne Rooney restored to the attack from midfield — but that the England forward would not complain about his new, withdrawn role.
“I played with Wayne for many many years and he’ll play left wing, he’ll play right wing, he’ll play wherever you ask him to play and he never complains,” Neville said.
“He always does the job for the team, he’s a team man.”
He added: “Because of (Van Gaal’s) track record and the fact that there’s been progression already, I think that they will win the league inside three years.
“He’s done it everywhere that he’s been and I’ve got no reason to doubt him.
“The first thing you do when you build a house is put the foundations in. Manchester United are tough to beat… so he’s put in a very good foundation of resilience.
“The flair, the nice bits, come after, and that’s what I think we’ll see.”
The 133-room Hotel Football, which flanks Old Trafford, is backed by former Manchester United team-mates Neville, his brother Phil, Paul Scholes, Ryan Giggs and Nicky Butt, along with Singapore billionaire and Valencia owner Peter Lim.
The football-themed, four-star hotel, with a five-a-side pitch on its roof, opens for business on March 2.