My answer below shows how to embed images using data URIs. This is useful for the web, but will not work reliably for most email clients. For email purposes be sure to read Shadow2531's answer.
Base-64 data is legal in an img
tag and I believe your question is how to properly insert such an image tag.
You can use an online tool or a few lines of code to generate the base 64 string.
The syntax to source the image from inline data is:
<img src="data:image/png;base64,iVBORw0KGgoAAAANSUhEUgAAAAUA
AAAFCAYAAACNbyblAAAAHElEQVQI12P4//8/w38GIAXDIBKE0DHxgljNBAAO
9TXL0Y4OHwAAAABJRU5ErkJggg==" alt="Red dot">