The Indians first restricted the visitors to 257 for seven and then overcame some anxious moments before overhauling the target with 15 balls to spare in a floodlit contest played in cold conditions at the PCA stadium.
Though the hosts had the game in control after putting England into bat, they conceded as many as 100 runs in the last ten overs with unheralded Joe Root (57 not out off 45 balls) and Kevin Pietersen (76) providing the late sparks with some lusty hits.
Captain Alastair Cook was another notable performer with a knock of 76.
But the Indians held their nerve during the run chase and it was ultimately Raina who guided the team home.
It was a creditable series victory for Mahendra Singh Dhoni and his men who had come under fire for indifferent performances in recent times, which saw the team lose a Test series to England and an ODI series defeat against arch rivals Pakistan at home.
It was Rohit Sharma, rated as highly talented but one who has seldom delivered, who turned the spotlight on himself as he grabbed with both hands an unexpected opportunity to feature in the playing eleven as an opener in place of Ajinkya Rahane.
Sharma proved his class with some delightful shots to lay the foundation for the chase and his show will enhance his chances of cementing a place in the ODI team.
Ravindra Jadeja hit the winning runs by taking three off Jade Dernbach to trigger off scenes of wild celebrations in the galleries and the Indian dressing room where the players hugged each other.
The two teams will now move to the picturesque town of Dharamsala for the last and final match on Sunday, though it has now been rendered inconsequential.
India lost opener Gautam Gambhir early but the left- hander, who has been out of form for quite a while, was distinctly unlucky to have been adjudged caught behind by umpire Steve Davis as replays suggested that there was no edge.
Gambhir tried to poke at an outside-the-offstump delivery off Tim Bresnan and the English fielders appealed for a caught behind which was upheld by the umpire. Gambhir was shocked and was seen shaking his head while walking to the pavilion.
The hosts could have been in more trouble had Pietersen not spilled a difficult catch of Sharma when he was on 12, with Bresnan being the bowler.
Sharma and Virat Kohli steadied the innings with a 52-run partnership for the second before James Tredwell struck for his team in his very first over by evicting Kohli for 26.
It was a tossed up delivery and Kohli drove it straight to the bowler for a simple return catch.
Local hero Yuvraj, who joined the action after Kohli's dismissal, did not survive long as he fell prey to Tredwell, who trapped him leg before as he went for a pre-meditated sweep shot.
Sharma notched up his 13th ODI half century and celebrated the moment by spanking Tredwell for a six and a four off consecutive deliveries.
Sharma, who came into the team in place of an out-of-form Rahane, found an able ally in Raina who scored at a brisk race to put the pressure back on the visitors. The pair scored 50 runs off just 37 balls.
Just when they seemed to be going great guns, Steve Finn provided the breakthrough by sending back Sharma with a ball that dipped in sharply, trapping the batsman leg before wicket. Sharma's 83 came off 93 balls and contained 11 boundaries and a six.
Raina was lucky to get a reprieve when he was caught by Cook in the slip but Davis signalled a dead ball as the bowler Finn had knocked the stumps over on his delivery stride, much to the relief of a near-capacity crowd.
Earlier, put into bat, England lost three wickets in quick succession in the middle of the innings after a reasonably good start, but the young Root unleashed a stunning counter attack to steer the total past the 250 mark, which looked doubtful at one stage.
Root, who clobbered eight boundaries and a six during his 45-ball blitzkrieg, and Pietersen were largely responsible for England's recovery.
Spinner Ravindra Jadeja was the pick of the Indian bowlers with 3/39 while Ishant Sharma 2/47 and R Ashwin 2/63 were the other wicket takers.
England's opening pair put on 37 runs for the first wicket before Ishant provided the breakthrough by evicting Bell, who perished to a rash stroke.
Bell decided to step out against Ishant but could not get to the pitch of the ball and Kumar pulled off a brilliant diving catch at the third man region.
Pietersen, who joined the action after Bell's dismissal, started off watchfully and took some time to get off the mark.
The experienced duo of Cook and Pietersen kept the scoreboard moving with gentle nudges and pushes and did not take too many risks as they steered England past 100.
The duo stitched 95 runs for the second wicket before off spinner Ashwin came to the hosts' rescue by dismissing Cook in what appeared to be a dubious decision by Sudhir Asnani.
Cook was wrapped on the pad while trying to play forward but the ball appeared to have pitched outside the leg stump line. Cook slammed 13 boundaries during his knock which came off 106 balls.
The departure of Cook triggered off a collapse of sorts as Eoin Morgan (3) and Samit Patel (1) perished in quick succession as England slipped from a comfortable 132 for one to 142 for four.
The visitors could have suffered another jolt on the same score but Kohli dropped a catch at first slip off Root when he had not even opened his account with Ishant being the unlucky bowler.
Morgan was out when Yuvraj took a well-judged catch as he attempted to chip the ball over mid-on off Ashwin.
Left-arm spinner Jadeja, who was India's bowling hero in the last two matches, then got into the act by accounting for Patel who offered a simple return catch.
Pietersen and the young Root ensured that there were further setback as both played with a positive frame of mind and counter-attacked the Indian bowlers.
Root was the more aggressive of the two initially as he smashed a few boundaries before Pietersen also joined him with a flurry of strokes. They completed their 50-run stand in just 46 balls.
Pietersen completed his 24th ODI half century by guiding a Raina delivery to the third man boundary, before opening up to play some glorious shots on both sides of the wicket.
It was overall a good performance: Mahendra Singh Dhoni
India skipper Mahendra Singh Dhoni today lauded the "overall good performance" of his players as they took an unassailable 3-1 lead over England in the five-match ODI series with a comprehensive five-wicket victory in the fourth and penultimate match here.
India chased down the 258-run target easily, thanks to some quality bowling and solid batting by the side and Dhoni said it was a good performance.
"Overall a very good performance. We were right on spot with the new ball. We started off well and didn't let them get off to a quick start," Dhoni said.
England scored 100 runs off the last 10 overs but Dhoni defended his bowlers, saying that it was a new attack and they will improve with experience.
"It is new bowling attack, they will learn a lot with more matches under their belt. 100 in 10 overs, it's bound to happen with the new rules. But overall I am happy."
Asked about Rohit Sharma, who initially anchored India's innings by starring in two crucial stands of 52 and 68 with Virat Kohli and Raina respectively, Dhoni said, "We all know Rohit is a gifted cricketer and it was a very good performance from him.
"He is a natural puller of the ball and one cannot bowl too many short deliveries to him. Once he got to his fifty, he converted it to a big one."
Dhoni was also happy that India fared well in different conditions throughout the five-match series.
"The conditions have not been typical subcontinental conditions, except Kochi, so the series win has been a good achievement," he said.
His English counterpart, Alastair Cook said it was the fourth wicket partnership of 68 runs off 8.3 overs between opener Rohit and Suresh Raina which made all the difference in the end.
"Rohit-Raina partnership really took things away from us. They changed the momentum, we could not stop them but to get this close was also a good performance," Cook said.
"I don't think the conditions were really in our favour. The ball nipped around all day but we knew if we have wickets in hand, we can get to 250-260.
"Joe Root played pleasingly, he moved the ball around well and we put up a pretty good score on this wicket," he added.
Suresh Raina, who steered India home with an unbeaten 79-ball 89 and was adjudged the Man-of-the-Match award, said, "I was talking to Rohit about staying positive and we had a tremendous partnership. It is important to back our natural instinct and also rotate strike and God has been kind and I took my chances today and I stayed till the end."
"I have been doing well of late. It is the result of the hard work that I have been putting up at the nets, thanks to the coach and the dressing room environment."
The left-handed batsman also praised Rohit for his 83-run innings off 93 balls which included 11 fours and one six.
"Rohit was playing really well, he showed some character in his innings. He was very responsible and he would be a happy man today," he said.
Asked about the standard of fielding in the Indian team, Raina said, "I remember Sachin told us that we have to No. 1 in the fielding, and today we fielded really well. Today, Kohli, myself, Jadeja all are good fielders and we are happy with the team."
Rohit said, "I came to know that I am opening this morning and I am happy that management gave me the chance and I did well today. We needed a team effort. It was difficult and I am happy I played a crucial role in the series win. I want to take it forward now."