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The vector quantization method for image compression inherently requires the generation of a codebook which has to be made available for both the encoding and decoding processes. That necessitates the attachment of this codebook when a compressed image is stored or sent. For the purpose of improving the overall efficiency of the vector quantization method, the need arose for improving a means for the reduction of the codebook size. In this paper, a new method for vector quantization is presented by which the suggested algorithm reduces the size of  the codebook generated in vector quantization. This reduction is performed by sorting the codewords of the codebook then the differences between adjacent codewords are computed. Huffman coding (lossless compression) is performed on the differences in order to reduce the size of the codebbook.