Since JPEG, improvements have included better lossless compression (entropy coding) of the DCT coefficients; deblocking filters, which blur the image across block boundaries; predicting the contents of DCT blocks from their neighbours, especially prediction of sharp edges; variable DCT block sizes, rather than a fixed 8x8 grid; the ability to compress some DCT blocks more aggressively than others within the same image; encoding colour channels together, rather than splitting them into three completely separate images; and the option to synthesise fake noise in the decoder, since real noise can't be compressed.
You might be interested in this paper: https://arxiv.org/pdf/2506.05987. It's a very approachable summary of JPEG XL, which is roughly the state of the art in still-image compression.
Regarding algorithms: Searching for "learned image compression", there are a lot of research papers which use neural networks rather than analytic algorithms like DCT. The compression rates seem to already outperform conventional compression. I guess the bottleneck is more slow decoding speed than compression rate. At least that's the issue with neural video compression.
In general, I'm pessimistic about prediction-and-residuals strategies for lossy compression. They tend to amplify noise; they create data dependencies, which interfere with parallel decoding; they require non-local optimisation in the encoder; really good prediction involves expensive analysis of a large number of decoded pixels; and it all feels theoretically unsound (because predictors usually produce just one value, rather than a probability distribution).
I'm more optimistic about lossy image codecs based on explicitly-coded summary statistics, with very little prediction. That approach worked well for lossy JPEG XL.
JPEG has 8x8 blocks, modern codecs have variable-sized blocks from 4x4 to 128x128.
JPEG has RLE+Huffman, modern codecs have context-adaptive variations of arithmetic coding.
JPEG has a single quality scale for the whole image, modern codecs allow quality to be tweaked in different areas of the image.
JPEG applies block coefficients on top of a single flat color per block (DC coefficient), modern codecs use a "prediction" made by smearing previous couple of block for the starting point.
They're JPEGs with more of everything.