The Foundation, which has former US President Bill Clinton as its Honorary Chairman, said it will be the largest prize of its kind and will be given to one exceptional teacher who has made an outstanding contribution to the profession.
Along with Kiran Bir Sethi, a teacher at The Riverside School in Ahmedabad, an Indian-origin teacher from Timor Leste, Madenjit Singh (Science of Life Studies), has also made it to the ten finalists, the Foundation said in a statement.
Sethi, who set up the Riverside School, said she teaches because she loves learning and in her job "no two days are ever the same -- So, everyday I can become an explorer, or an artist, a magician or a storyteller."
Varkey Foundation founder Sunny Varkey said the award has received a huge global support.
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"We introduced the prize in order to return teachers to their rightful position - belonging to one of the most respected professions in society."
Spacey, who is on the Global Teacher Prize Academy panel that will choose the final winner, said: "When I was starting out, I was inspired by an older, more experienced actor, who told me that he thought I ought to go into acting professionally.
"That's the kind of mentoring and personal support that every young person needs to realise their potential."
Varkey Foundation, the philanthropic arm of GEMS Education, said the winner will also be asked to serve as a global ambassador for the Varkey Foundation, attending public events and speaking in public forums about improving the prestige of the teaching profession.
The award ceremony will take place on March 15 at the Global Education and Skills Forum in Dubai, to be attended by education ministers, international education experts and business leaders from across the world.