The effect of diffractive shadow evidently degrades the performance of the multiple-image encryption system based on double phase encoding. The region multiplexing is proposed to solve this problem. Since multiple images to be encrypted are located in different regions of each output plane,the noise arising from the effect of diffractive shadow can be suppressed. The corresponding phase retrieval algorithm is studied through theoretical analysis and computer simulations. After the whole iterations with the normal sequence,the image with the worst decrypted quality is compensated one by one. In this way,we can obtain the sequence of sub-iteration which is objectively suitable for the characters of multiple images to be encrypted. Based on this sequence,either an adjusting iteration after the whole iterations with the original sequence or completely changing the sequence of the whole iterations can be adopted. As a result,maintaining the advantage of the phase retrieval algorithm converging fast,both the quality of all decrypted multiple images and the multiplexing capacity of the system can be improved.