The department has estimated about one in 30 people in affected northern Victorian council areas may have contracted the virus after a serosurvey indicated a greater number of cases than the 13 reported during last year's mosquito season.
The survey took responses and blood samples from 800 participants in Loddon Mallee, Goulburn Valley and Ovens Murray.
The majority of those who showed evidence of prior infection were male and were identified in all three regions surveyed.
"By finding more cases than we were previously aware of, this important research reinforces the risk to all in the community that mosquito-borne diseases pose especially in light of recent flood activity," Victoria's deputy chief health officer Deborah Friedman said in a statement.
Victoria's health department has expanded free JEV vaccine eligibility to include Greater Bendigo, Northern Grampians, Hindmarsh, Horsham, Buloke, Yarriambiack and West Wimmera council areas.
Mosquito-borne diseases have been on the rise in flood-affected areas in southeastern Australia, with cases of JEV detected in NSW, Victoria and South Australia.
In February, Victoria recorded its first Murray Valley Encephalitis death since 1974 and NSW confirmed its first MVE case since 2011.
There is currently no preventative vaccine for MVE.
Most people with either virus don't develop symptoms, but both can cause a clinical illness in a small number of infected people.
Symptoms may include fever, severe headache, nausea, vomiting and muscle aches, and in serious cases people may develop meningitis or encephalitis which can be fatal or cause permanent neurological harm.
Earlier this month, SA expanded its eligibility criteria for the JEV vaccine to include about 100,000 residents after previously being restricted to piggery workers who were considered high-risk.
Dr Friedman recommended people in affected areas should take steps to avoid mosquito bites.
"Wear long, loose-fitting, light-coloured clothing, use insect repellents, clear stagnant water around homes or properties, and avoid the outdoors when mosquitoes are observed, especially at dusk and dawn," she said.
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