Brazil have enjoyed a impressive revival since Tite replaced Dunga as their national team coach last year, winning all nine matches they have played under his leadership including eight World Cup qualifiers.
They continued their run in March with a 4-1 win in Uruguay and 3-0 win over Paraguay to become the first side to book their place at next year's World Cup in Russia with four games to spare.
Brazil, who replaced arch-rivals Argentina at the top, previously led the rankings going into the 2010 World Cup where they were eliminated by the Netherlands in the quarter-finals.
Since then, they have suffered a string of embarrassments, with elimination by Paraguay at successive Copa America tournaments in 2011 and 2015 and their infamous 7-1 loss to Germany in the 2014 World Cup semi-final.
Argentina lost their place after last week's 2-0 defeat in Bolivia which has left them struggling to qualify for the 2018 World Cup.
Four of the top five teams in the rankings announcement by FIFA on Thursday, are from South America. Chile are fourth, Colombia fifth and Germany sandwiched in between in third.
Egypt are Africa's best-placed team in 19th while Asia's top side are 28th-placed Iran.
Top ten rankings (previous month's places in brackets)
1. Brazil (2)
2. Argentina (1)
3. Germany (3)
4. Chile (4)
5. Colombia (7)
6. France (6)
7. Belgium (5)
8. Portugal (8)
9. Switzerland (11)
10. Spain (10)
(Writing by Brian Homewood; editing by Sudipto Ganguly)
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