It is their lowest position since 2001 when they also occupied 17th place following a dismal run under Kevin Keegan that ended with the subsequent improvement under Sven-Goran Eriksson.
In August last year they climbed to an all-time high of third, although this exposed the rankings system to ridicule given their indifferent performance at the 2012 European Championships.
The slide to 17th will invite further criticism of Hodgson, who has presided over an unconvincing qualification campaign for next year's World Cup - one made notable for some dour football.
The position has ramifications for the tournament in Brazil as the top seven teams, plus the hosts, are expected to be among the seeded nations when the draw in made in December.
Greece, Switzerland and the United States are three of the teams placing higher than England in the rankings, as are Russia, who are coached by former Three Lions boss Fabio Capello.
The grip of reigning world and European champions Spain on first place has strengthened and they lead Argentina, who have climbed two spots to second, by 251 points.
Germany have dropped to third and Italy climbed two places to fourth with Colombia in fifth.
Belgium's rise continues after they powered up to sixth - a move of four places - but the biggest climbers of all inside the top 20 are the USA who have risen from 19th to 13th.
@chelseablue_no1 - You took the words out of my mouth. When England went 3rd last year, it was a falw in the rakings. Now that we have dropped down, it's Roys fault. Never mind the fact that the USA have played nearly 20 games this year, not to mention their "competitive" games are against some truly laughable sides, is it any wonder they have over-taken us? We have Poland and Montenegro to play at home and I would expect us to move right back into the top ten if, as expected, we beat them.- HarryBoulton