The paper presents a novel algorithm for automated malaria diagnosis using 40x microscopic images of blood smears, improving upon existing methods by utilizing a two-tone adaptive median filter and Sauvola segmentation. The approach demonstrated high sensitivity (81.58%), specificity (97.11%), and accuracy (96.71%) in detecting Plasmodium falciparum compared to previous techniques. This low-cost system could significantly enhance malaria diagnosis in low- and middle-income countries, addressing a critical health issue in endemic regions.