In this research work, proposing an algorithm, which dynamically selects the best compression algorithms among several compression techniques for steganography encoding. Ranking and selection of best algorithm for each and every steganographic transaction is based on several factors like type of cover image being used for the transmission, length of the secret message, type of the message, compression ratio of the secret message being shared, encoding ratio of secret message over the medium etc., The proposed algorithm dynamically ranks and selects the right compression algorithm to be used for the given secret file to occupy lesser embedding space in stego-image.