Open the image in Photoshop.
Click on the Image menu and select 'Image Size'.
Make sure the image is sized appropriately for your needs. The resolution should be set at 72 DPI. These settings will be in the Image Size Dialogue Box when you click Image Size from the Image menu.
Then, from the File menu, select 'Save for Web'.
In the 'Save for Web' dialogue box, you will want to set the quality to 50% (in most cases). The File Type should be set to your desired setting (JPEG or PNG are the most common). The Compression Quality should be set to Medium (in most cases). The Optimized box should be checked.
The image is now ready to be uploaded to the server via the File Manager and added to your page.