In VQ based image compression technique has three major steps namely (i) Codebook Design, (ii) VQ Encoding Process and (iii) VQ Decoding Process. The performance of VQ based image compression technique depends upon the constructed codebook. A widely used technique for VQ codebook design is the Linde-Buzo-Gray (LBG) algorithm. However the performance of the standard LBG algorithm is highly dependent on the choice of the initial codebook. In this paper, we have proposed a simple and very effective approach for codebook initialization for LBG algorithm. The simulation results show that the proposed scheme is computationally efficient and gives expected performance as compared to the standard LBG algorithm.