How can I encapsulate some text information into an image and extract it using MATLAB?

I believe you are looking for steganography . You can get started with this MATLAB LSG steganography implementation .

An easy way to perform LSB steganography is to obtain a lossless compressed image and set the LSB of each component (R, G, B). Then for the mxn image, you get 3mn bits to store the information. Since you are changing the LSB, the difference will not be perceived in the image.

Update

SO I decided to create a small, ineffective but demo example:

function LSBStega    
        %%// Image and text
        I = imread('coins.png');
        text = 'Hello World etc';
        assert(numel(I) > numel(text)*8,'Insufficient number of pixels');

        %%// Encode
        %// The end character signifies the end of the hidden text
        end_char = '.';
        %// Append it
        text = [text end_char];
        %// Convert each character into binary form with atleast 8 bits
        %// We transpose it before calling (:) since the binary representation
        %// is stores each character in binary per row and the (:) operations
        %// vectorizes the matrix by column.
        b = transpose(dec2bin(text,8));
        %// Find which bits should be set to 1 or 0
        ind_0 = find(b == '0');
        ind_1 = find(b == '1');
        %// Set the appropriate bits to 1 and 0 and leave the rest alone
        I(ind_0) = bitset(I(ind_0),1,0);
        I(ind_1) = bitset(I(ind_1),1,1);

        %%// Faster decode
        text_back = [];        
        for i = 1:8:numel(I)
            %// Extract the LSB from a set of 8 bytes in the image
            C = bitget(I(i:i+7),1);
            %// Convert from binary to decimal
            C = bin2dec(num2str(C));
            %// Check if it the end character; break if so, store if not
            if(C == end_char) 
                break;
            else
                text_back(end+1) = C;
            end
        end
        %// Convert to text
        text_back = char(text_back);

        %%// Display
        subplot(1,2,1);
        title('Original');
        imshow(imread('coins.png'));
        subplot(1,2,2);
        title('Steganography Result');
        imshow(I);
        disp(text_back);    
end