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The two nations have won the World Cup a combined nine times and went into the Fifa ceremony as the two most-fancied to be popping champagne in Moscow on July 15.
Holders Germany have been drawn alongside Mexico, Sweden and Korea Republic, while five-time winner Brazil will face Switzerland in their Group E opener before matches against Costa Rica and Serbia.
Euro 2016 runners-up France are also considered front-runners for World Cup glory, and Belgium are shorter odds than group rivals England.
But Gareth Southgate's men are the biggest movers following Friday's draw, moving from 25/1 to 16/1 to win the tournament outright and 11/10 to win their group.
The Three Lions have been handed a favourable group alongside Belgium, Tunisia and debutants Panama, but Southgate insisted he would be taking nothing for granted after England's exit from the 2016 European Championships at the hands of Iceland.
"We've been good at writing teams off and then getting beaten by them haven't we?" he added. "We've got to make sure we're prepared for all of those games.
"It's fantastically exciting to be here for the draw with every other coach. I'm really looking forward to getting on with it now.
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"The objective is to qualify from the group. You're never quite sure how many points you need for that and there will be ups and downs along the way I'm sure.
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"For me personally, to play in a World Cup for my country was an incredible honour. To lead my country there as a manager is beyond that."
Odds (via Betfair, UK users only)
5/1 Germany
5/1 Brazil
6/1 France
15/2 Spain
8/1 Argentina
12/1 Belgium
16/1 England
25/1 Colombia
25/1 Portugal
28/1 Croatia
33/1 Russia
40/1 Uruguay
Other
Click here to place a bet. Odds correct as of 5pm on December 1.
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