Portugal is actually England's oldest ally, and in fact the oldest alliance in the world that still exists.

The English and Portugese first co-operated when the English (and others) were on their way to the Second Crusade, and stopped on the way to help the Portugese conquer Lisbon.

In 1386, the two countries formed a more concrete alliance, the Treaty of Windsor, reinforced by the marriage of the Portugese King to the King of England's cousin Phillipa (and that King was later overthrown... by Phillipa's brother Henry IV). Phillipa's father fought a war to claim the Crown of Castille, with Portugese help (though he lost).

Although the two countries sometimes broke their alliances, when the Portugese fought for their independence from Spain, during the 30 years war, they asked for English help, and so the alliance was reinvigorated.

In the War of Spanish Succession, Portugal initially sided with France, but later switched to the British side. And so, after this war, before the Seven Years War, their relations were extremely good. This continued through the Seven Years War, in which Spain invaded Portugal but was defeated by Portugal, with British help. Britain also helped defend Portugal in the Napoleonic Wars

The Portugese were very angry when, in 1890, Britain gave them an ultimatum to abandon their south African colonies. However, the alliance was reaffirmed in WW1.

In WW2, Portugal remained neutral, but kept the alliance up: Churchill didn't want them to join the war, because he felt Portugese neutrality was the best way to keep Spain out of the war. However, the Portugese did let Britain use some of its islands, and gave some aid, when Churchill invoked the 600-year old alliance, and he was sure Salazar would join them if it became absolutely necessary. On its side, Britain was very complimentary towards Salazar, considering him not a dictator, but a great man. Oxford University gave him a honorary degree, and the British considered his regime entirely different from the semi-Fascist regime in Spain (as I understand it, they weren't quite so different, though I'm not very well-read on Salazar).

When Britain set up EFTA, its rival to the EEC, Portugal was one of the founding members.

During the Falklands War, Portugal offered its islands for Britain to use again.

In the modern day, of course, both are members of NATO and the EU, so the Anglo-Portugese Alliance doesn't actually do anything, but it's still legally in force.