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In order to protect digital image's information and renew the image that is attacked by shearing, this paper presents a novel image encryption algorithm based on Tangent-Delay Ellipse Reflecting Cavity map System (TD-ERCS) chaos sequences. One of the TD-ERCS is used to shift the image's pixel position, another is used to alter the pixel value, so that the image will be scrambled and encrypted. While doing the decryption, a method, which is based on the neighboring pixels characteristic, is provided to recover the sheared image. Theoretical analysis and experimental results show that the algorithm has a large space of keys, a good encryption and decryption effects, a better security performance to statistical analysis and a strong ability against shearing.