When taking large Terraria captures, you can either turn "image packing" on to produce a single low-quality image, or you can leave it off to produce a folder containing several chunks of the full screenshot without any quality loss. This tool will take all those smaller chunks and stitch them together into one large full-quality image.
Simply move the ImageStitcher.exe file into the same folder as the images you want to stitch and double click it to run the script.
Do not run this program in your "Terraria/Captures" folder, you must run it in the "Terraria\Captures\Capture YYYY-MM-DD HH_MM_SS" folder, where Y, M, D, H, M, and S are numbers representing the date and time the capture was taken.