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.
They leap-frogged Uruguay because the points which the South American side earned in winning the Copa America one year ago lost some of their value under the complicated system of co-efficients used to determine the rankings.
England's record high is the only change in the top 10, while Brazil have dropped down two places to 13th and Russia have moved up to 11th.
At the bottom of the rankings, recently-founded nation South Sudan have entered the table as the 209th member of FIFA.
A 2-2 draw at home to Uganda in a friendly played in Juba on July 10 has put South Sudan 199th in the table. South Sudan, which became fully independent last year, joined FIFA in May after being voted in at the annual Congress.
The team, made up nearly entirely of home-based players, is coached by widely-travelled Serb Zoran Djordjevic, who has also taken charge of Yemen, Sudan and Bangladesh in a career which has taken him around Africa and Asia.
There were few other changes with only 12 full internationals played in the last month. Spain are top while five-times world champions Brazil remained outside the top 10.
1. (1) Spain
2. (2) Germany
3. (4) England
4. (3) Uruguay
5. (5) Portugal
6. (6) Italy
7. (7) Argentina
8. (8) Netherlands
9. (9) Croatia
10. (10) Denmark
- South Sudan