This paper proposes an improved DCT-based image codec embedded cubic spline interpolation (CSI) with optimal quantization. It is shown in literature that CSI is superior in performance to the other interpolation functions. One of main applications of the CSI is to cooperate with standard DCT-based JPEG to obtain the modified JPEG codec and still obtain a better quality of the reconstructed image for higher compression ratios. This paper shows that the compression performance of such a modified JPEG codec can be further improved by the use of optimal quantization. The optimal quantization makes use of the rate distortion optimization algorithm to measure DCT coefficient statistic for an image generated from the CSI scheme and then construct a DCT quantization table for the given rate/distortion specification. Experimental results show that the proposed optimal quantization can achieve a better PSNR than that of the modified JPEG codec with a default quantization table.