The slippage comes despite a quarter-final exit at Euro 2012, Roy Hodgson's side reached third in August last year - an all-time high.
Spain - which won the last two European Championships and the 2010 World Cup - has now held top spot in the table since September 2011, while Argentina moved up two places to second.
One new comer in the top 10 slot is Uruguay which has jumped into the top 10 after rising five positions to seventh.
Belgium's rise continued as they moved up to sixth - a four-place improvement - but the biggest climbers of all inside the top 20 were the USA, who leapt from 19th to 13th.
The FIFA world ranking of the top 10 teams is now as under:
1 Spain 1514 (1)
2 Argentina 1263 (4)
3 Germany 1261 (2)
4 Italy 1199 (6)
5 Colombia 1180 (3)
6 Belgium 1159 (10)
7 Uruguay 1126 (12)
8 Brazil 1067 (9)
9 Netherlands 1058 (5)
10 Croatia 1051 (8)
The FIFA world ranking of the top 10 teams is now as under:
1 Spain 1514 (1)
2 Argentina 1263 (4)
3 Germany 1261 (2)
4 Italy 1199 (6)
5 Colombia 1180 (3)
6 Belgium 1159 (10)
7 Uruguay 1126 (12)
8 Brazil 1067 (9)
9 Netherlands 1058 (5)
10 Croatia 1051 (8)






