They said Wednesday's sentence would have been harsher had she been convicted of abusing Americans and added that it exposed US hypocrisy.
"America should be ashamed of this sentence. This is the best evidence that Americans have double standards," said Akram Abdel Amir, a retired bus driver in Baghdad.
"There are Iraqis in jail without any charge, just based on suspicion. But when it comes to Americans, the matter is totally different."
England, 22, was sentenced on Tuesday by a US military court after being convicted of abuse, including being photographed pointing to the genitals of a naked Iraqi prisoner.
Chicken factory worker
The former West Virginia chicken factory worker, who had faced a maximum sentence of nine years, was given a dishonourable discharge from the military.
She is the last of a group of US soldiers to be convicted of abuse at Abu Ghraib, which included her former boyfriend and father of her child, Charles Graner, who is serving 10 years.
"If the abuse was committed against Americans I am sure the sentence would be much harsher. The sentence is nothing compared to what she has done," said labourer Muntasser Abdel Moneim, 30.
The prosecution asked the jury for a sentence of four to six years. England was found guilty on six counts on Monday.
The prisoner abuse scandal provoked global outrage and deepened Iraqi resentment against US troops in the country.
In pre-sentencing testimony, England said she was sorry for her actions but remained an American patriot.
But she is remembered as the US soldier who held an Iraqi inmate by a leash like an animal.
The images of a smiling England abusing naked inmates were especially humiliating in Iraq, a male-dominated society.
"The whole thing is theatre. The Americans want to pretend they defend human rights and are a civilised nation," said Munir Abdel Sahib, a university lecturer.
"I believe that England would not have committed these crimes without orders from above."
In court testimony, England blamed her involvement on Graner, the abuse ringleader, who was convicted of abusing prisoners at Abu Ghraib.
Graner has since married another former Abu Ghraib guard, Megan Ambuhl, who was charged but received no jail time and stayed in the military.
"There is no justice in this sentence because the pictures were very shameful. She has to get more years in jail and she has to be imprisoned in Iraq," said Najaat al-Azawi, 55, a retired engineer.
Grocery store owner Hussein Ali said the fact that England faced trial was positive but stressed justice was not served.
"It means the Americans can get away with everything in Iraq. Three years is not enough for what she has done."
US forces are holding about 11,800 prisoners at several detention centres in Iraq, including 4000 at Abu Ghraib.
Iraqi families, human rights groups and some Iraqi government ministers, including the justice minister, say too many Iraqis are being wrongfully detained for too long without due process.