Grub splash images must be:
1. xpm.gz file type
3. 14 colours only
So just use your favourite graphics app and have at it. You can use Image Magick to convert any arbitrary image to the required format (eg: jpg):
$ convert -depth 14 -resize 640x480 image.jpg newimage.xpm && gzip newimage.xpm
BTW I found this info at the first result after searching google for "create grub splash image"