The Harimau Malaya have dropped by two places to 156th in the October 2014 ranking released by FIFA on Thursday.
In the Southeast Asia region, Dollah Salleh's men are now behind the Philippines (129th), Vietnam (136th), Myanmar (137th) and Laos (154th), but are ahead of traditional rivals Indonesia (157th), Singapore (161st) and Thailand (165th).
Malaysia won only two matches out of six in 2014, beating Yemen 2-1 in the 2015 AFC Asian Cup qualification in March and Cambodia 4-1 in a friendly last month.
The ranking might have been different if the friendly match with the Philippines on October 11 was not cancelled due to a scheduling conflict with the ongoing Malaysia Cup tournament.
The country's highest standing was at 75th in August 1993, when the FIFA World Ranking was first introduced, but they have since fallen as low as 170th in 2008.