This paper presents an improved still image compression technique using the H.264/MPEG-4 AVC standard, which enhances compression rates and quality through intra prediction and Huffman coding. It also proposes a data hiding algorithm utilizing Singular Value Decomposition (SVD) for embedding a secret image within the encoded bit stream, ensuring a good balance between compression and image quality. Experimental results demonstrate the method's superior performance in terms of compression ratios and peak signal-to-noise ratios compared to existing methods.