Within the framework of time-dependent density-functional theory (TDDFT), we derive the dynamical linear response of local-density approximation plus
functional and benchmark it on NiO, a prototypical Mott insulator. Formulated using real-space Wannier functions, our computationally inexpensive framework gives detailed insights into the formation of tightly bound Frenkel excitons with reasonable accuracy. Specifically, a strong hybridization of multiple excitons is found to significantly modify the exciton properties. Furthermore, our study exposes a significant generic limitation of adiabatic approximation in TDDFT with hybrid functionals and in existing Bethe-Salpeter-equation approaches, advocating the necessity of strongly energy-dependent kernels in future development.