I want to improve the resolution on this dragon, it's from an old game, so of course its highly pixelated, how can this be made smoother, more modern?
Use SmillaEnlarger, which you can find here:
Of course you should not do this. You should not even want to do this. But I hate it myself when people try to tell me what to want.
=== an aside === The best way is to paste this bitmap into Inkscape and take some time (yes) and trace it and make a new vector graphic. That way you can even add some minor changes and have your own colours and possibly avoid copyright issues (I am not an expert on how much you would need to change to make it your own.).
Then export from Inkscape as a PNG and you have a phantastic new, crisp bitmap in any resolution you need. === back to my main answer ===
We have used SmillaEnlarger when we absolutely had to. Not ideal, but the best tool we have found and used so far, for boosting old bitmaps for quick jobs. It takes time to learn about Smilla and its settings-options. So if this is just about this one illustration, your time might be better spent by tracing the dragon. hth