The annual update also saw Australias lead cut to eight rating points by South Africa.
India had dropped to the fifth place after beaten 4-1 in the five-match ODI series in the West Indies.
The annual update is carried out to ensure the LG ICC ODI Championship table continues to reflect recent form with older results being discarded. As such, the new table only includes results from matches played after August 1, 2003.
South Africas improved rating is down to a turn-around in fortunes in the past 18 months.
In January 2005 it was languishing in seventh place in the table but since then it has enjoyed a strong run of form culminating in a famous 3-2 series win over Australia.
The rankings of most of the other teams are largely unchanged by the update although India has moved up the table thanks to some impressive displays over the past year.
Bangladesh gradual improvement is also reflected by the way it has gained eight rating points and as it now trails Zimbabwe by only two points it has the chance to overtake the African side during the two sides upcoming five-match series that starts on 29 July.
That series, that also features matches on July 30 and August 2, 4 and 6, will be the first one to be rated under the updated LG ICC ODI Championship table.
LG ICC ODI Championship: 1. Australia (131) 2. South Africa (123) 3. Pakistan (115) 4. India (113) 5. New Zealand (111) 6. Sri Lanka (107) 7. West Indies (99) 8. England (96) 9. Zimbabwe (33) 10. Bangladesh (31) 11. Kenya (7)