Phil Neville's squad moved up thanks to their success at the SheBelieves Cup in the United States earlier this month, where they drew with the hosts and secured wins over Brazil and Japan to win the four-nation competition for the first time.
However, world champions the U.S. maintain their top ranking and are still the team to beat going into the World Cup which takes place from June 7-July 7.
The Americans are the most successful team in the tournament's history, having won it three times and have only been defeated once in their last 30 matches.
Germany remain second in the rankings while France slip down to fourth, although they were one of the few top nations not to participate in a friendly tournament this month. Corinne Diacre's side beat Uruguay 6-0 on their last outing earlier this month.
France open the World Cup, which features 24 nations, against South Korea at Paris' Parc des Princes on June 7.
(Reporting by Christian Radnedge, editing by Pritha Sarkar)
