You can use the image function to insert an image object in an axes.
Below you see an example. As you can see, you will have to flip the y-axis on the image yourself.
im = imread('peppers.png');
plot(1:10,rand(10,1))
axis([1 10 0 1])
hold on
x=linspace(2,4,size(im,1));
y=linspace(0.2,0.5,size(im,2));
image(x,y,im)
