Roy Hodgson's side exited Euro 2012 at the quarter-final stage and have failed to reach the last four of a major competition since 1996.
Yet they have moved above Uruguay into third in the standings, which are led by Spain with Germany in second place.
England were outclassed by Italy in their quarter-final in Kiev six weeks ago, yet bizarrely are ranked three places higher than the finalists.
Portugal, who reached the semis at Euro 2012, are also lower, as are Holland and Argentina.
In a further quirk of the standings, Brazil are 13th - one position below Greece and three beneath Denmark.
England's lofty position asks significant questions of the way the rankings are calculated.
Apart from a friendly win over Spain last November and the 5-1 thrashing of Croatia in a qualifier for the 2010 World Cup, England fans have had precious little to celebrate in recent times.
The nation's last victory against significant opposition at a major competition was the 1-0 win over Argentina at the 2002 World Cup in Japan and South Korea.
FIFA state their rankings are based on all international matches, including friendlies, played in the previous four years.
The criteria included are the outcome, status of the match, opponent's strength and the strength of team's confederation.
Wins against high ranking opponents in competitive matches are very valuable, while only results over the last 12 months count in full.
Those from the previous year count half, while games played up to three and four years earlier have even less significance.
Since the 2010 World Cup, England's record reads a respectable won 13, drawn five and lost three.
But their inability to launch a meaningful challenge at tournaments, where they have consistently fallen short against quality opponents, will bemuse supporters surveying the last FIFA rankings.
FIFA today stressed that England's poor record at major tournaments has little bearing on the rankings because only matches played within the last four years are taken into account.
Instead, England accumulated most of their rankings points during successful qualifying campaigns for the 2010 World Cup and Euro 2012.
FIFA explained that the anomaly of Roy Hodgson's side being placed higher than Italy, despite their clear inferiority in Kiev, is because they have amassed better results over the last four years.
At Euro 2012, England secured two wins and two draws in four matches, whereas Italy compiled two wins, three draws and one defeat in six matches.
Wins or losses after penalty shootouts are considered a draw for ranking purposes.