A shock win at EURO 2016 has taken Fernando Santos's side up two places, while the previous European champions are now down to eighth.
Argentina remain top despite losing the final of the Copa America Centenario in June, while the four nations behind them - Belgium, Colombia, Germany and Chile - remain unchanged.
France, who were beaten by Portugal in the EURO 2016 final on Monday morning (AEST), have jumped 10 places into seventh, while Italy are back in the top 10 after their run to the quarter-finals.
Surprise semi-finalists Wales are up 15 places to 11th, two ahead of England.
Iceland, who knocked England out of the Euros, are up 12 places to 22nd - their best ever position - while Croatia and Poland enjoyed big climbs to 15th and 16th place respectively.
New Zealand are the biggest movers, with their triumph at the OFC Nations Cup lifting them 54 places to 93rd. Austria, who failed to win a match in France, are down 11 places to 21st.
Venezuela, who reached the Copa America quarter-finals, are into the top 50, climbing 31 places to reach 46th.
Australia remains in 59th place, two spots adrift of AFC FIFA World Cup qualifying rivals, Japan.
FIFA top 10 rankings: