Future high resolution optical instruments for space remote sensing will lead to higher data volumes. Hence, on-board image compression becomes mandatory considering constraints in data rate. MLG (MultiLinear-Gain) compression (12:10) technique has been used in AWiFS payload of Resourcesat-2 mission. The main advantage of MLG is its improved SNR at low reflectance values and low on-board hardware resources. However SNR degrades at high reflectance values. Hence, a study is carried out to improve SNR performance in entire dynamic range. Adaptive Differential Pulse Code Modulation (ADPCM) is one prediction based image compression technique, which has been used by other space agencies with their own proprietary algorithm. Hence a custom ADPCM technique with two quantizers is developed while maintaining similar 12:10 interface. Developed technique provides improved SNR throughout full dynamic range and recovers >99.5% pixel data losslessly. Root-Mean Square Error (RMSE) performance is also improved from 1.5 to 17 times depending on image contrast. Developed technique is low complex and can be implemented in low end FPGA without any additional memory.