WWI fought with dragons? England as the land of Faerie? A space flight that runs on mummy dust? It was only a matter of time until fantasy figured out that everything's better with a little bit of magic, even history.
Susanna Clarke's fantastic Johnathan Strange & Mr. Norrell has probably done more to tie magic and England together in recent years than any book that doesn't have "Harry" or "Potter" in the title, and the book's references to George III as well as it's portrait of 19th century England make for an exciting alternate history tale.
Still, Norrell isn't the only book to theorize a magical Britain. Randal Garett's Lord Darcy stories, beginning with Too Many Magicians, are detective stories set in an England where magic has been formalized into a science with its own internally consistent laws and theories. Gail Carriger's Parisal Protectorate series has a Victorian London filled with vampires and werewolves with a dash of Steampunk thrown in, and the female heroine of the first book in the series, Soulless, has a single secret weapon. She literally lacks a soul allowing her to negate the supernatural abilities of her foes. Michael Moorcock even got in on the trope with Gloriana, a novel that re-imagines Elizabeth I as the titular Gloriana, ruler of the magical empire of Albion.
Though it certainly seems to help, you don't have to be British to have magic. Poul Anderson's Operation Chaos takes place in a world where magic is commonplace and is used to fight in an alternate second World War against a magical Islamic Caliphate. The sequel, Operation Luna, involves a magical space flight as well as a supernatural IRS. The Alvin Maker series by Orson Scott Card takes place in a 19th century America with supernatural "knacks" who have magical abilities. While the novels mainly center on Alvin Miller and his knack for making, various historical figures are mentioned as knacks such as Benjamin Franklin and Napoleon.
Kurt Busiek's short-lived comic Arrowsmith took place in a world where the "United States of Columbia" was engaged in an alternate WWI fought with magic and supernatural beings from vampires to dragons. And on the subject of dragons, Naomi Novik's Temeraire series takes place during an alternate 19th century where sapient dragons cover the earth and human beings ride them as enormous weapons of war. The various books in the series tour different parts of the world exploring different breeds of dragons and the unique relationships various nations have with the creatures.
[Illustration by Matt Soffe]