In this paper, Contrast Enhancement Algorithm using Histogram Threshold and Dynamic Range Expansion Factor is proposed. Histogram equalization is widely used for image processing system. However, histogram equalization often cause luminance saturation and image distortion. Proposed method uses plateau equalization based on threshold and effective dynamic range expansion factor in narrow dynamic range to prevent the side-effect due to the over-enhancement and image distortion. The experimental results show that proposed method has better performance compared with conventional methods.