The remains were found along the A303, near West Knoyle, by archaeologists ahead of a new water main being laid.
Wessex Water said the woman's feet were found "reburied alongside her" along with the carcasses of at least two sheep or goats "on her head".
Peter Cox, from AC Archaeology, said: "We're unsure why - but it must have some link to beliefs at the time."
The female skeleton was found alongside the remains of a child aged about 10 and two males with sword wounds to their hips.
Wessex Water is currently building a 40-mile (64km) pipeline to carry water from a Dorset treatment plant into Wiltshire.
It was during a pre-work survey of the West Knoyle area that AC Archaeology unearthed the Iron Age burial site.
"Human remains from these periods are very rare and indicate the long period of settlement that has occurred in the area," said Mr Cox.
"But we're unsure why the female skeleton has been found without her feet or why she may have been buried with sheep, but perhaps it was to protect her soul from bad spirits."
The bones have been removed from the site and will undergo radiocarbon dating to determine their age.
A skeleton of an Iron Age woman with her feet chopped off has been discovered in a field in Wiltshire.