England have moved up to third place in the FIFA world rankings - their highest-ever position - despite exiting Euro 2012 at the quarter-final stage.
The national team have not reached the semi-finals of a major competition since hosting the European Championship in 1996, but are now above Uruguay. Spain and Germany are the top two.
FIFA said England's poor record at major tournaments had little bearing because only matches played within the last four years are taken into account for the rankings.
England accumulated most of their ranking points during qualifying campaigns for the 2010 World Cup and Euro 2012.
FIFA said Hodgson's team were higher than Italy was because their results over the last four years had been better. At Euro 2012, they had two wins and two draws in four games, with Italy notching two wins, three draws and a defeat in six matches.
Wins or losses after penalty shootouts are counted as draws for the purposes of the rankings.
Last month, the FIFA secretary general Jerome Valcke felt he had to defend the world governing body's ranking system, admitting it can throw up situations that seem "not very logical."
Valcke said the rankings, which determine whether teams will be seeded in the draw for the 2014 World Cup, still presented "a good picture of the level of international football" but said FIFA wanted to be able to better explain how they worked.
At that time, England, coached by Roy Hodgson, were fourth, while Brazil lay 11th. Italy, who beat England at the Euros, were sixth. Brazil had fallen from fifth to 11th but, as 2014 World Cup hosts, do not play any competitive qualifiers - which means they do not gain as many ranking points.
"I know that these rankings are sometimes quite difficult to understand due to the level and numbers of criteria that are taken into account," Valcke said.
"There are teams who are playing more friendly games than other teams and you can see a difference which is not very logical - but the ranking, I would say, is clearly still a good picture of the level of international football.
"There have been internal meetings... to discuss the ranking of the different nations. We want to be able to explain in an easier way how this ranking is based."
FIFA's rankings are based on an international side's results over the previous four years, with more points awarded from competitive matches than qualifiers.
They are weighted more strongly towards matches in the final stages of World Cups and continental tournaments.
The latest rankings have seen Portugal, Italy, Argentina, Holland, Croatia and Denmark consolidating their top ten places. Brazil have fallen to 13th, with France 14th.
The Republic of Ireland stay in 26th, Wales rise to 37th, Scotland move into 46th and Northern Ireland are 101st.