"The Divine Image" subtly alludes to biblical stories in both its title and its general ideas.
In the first chapter of the biblical Book of Genesis, God is said to create humans "in [his] image, according to [his] likeness." In other words, God builds humans so that they resemble him. To this poem's speaker, that doesn't mean that God is a human-shaped being or humans look the way they do because that's how God looks. Rather, the speaker feels that the "Divine Image" of God is a set of qualities that get expressed through the human body: "Mercy, Pity, Peace, and Love." In fact, these qualities are "God, our father dear." Anywhere that these virtues appear, then, God himself is present.
The poem's central allusion to the biblical creation myth thus provides a leaping-off point for a big (and, at the time Blake was writing, iconoclastic) idea: every single human being carries God inside them, because every single human being can express "Mercy, Pity, Peace, and Love" (and, again, in the speaker's mind, those qualities are God). The "human form" itself is thus "divine" because it's the way that God exists on earth.
Through this idea, the poem also alludes to the Incarnation: the Christian idea that Jesus was completely a human being and completely God at exactly the same time. In this poem, every "human form" is an incarnation of God in just the same way, since everyone can express and contain God.