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We have a large number of GeoTIFF images that are georeferenced. Understandably, they are extremely large, due to the TIFF format.

Ideally we would like to use jp2 images, however this image type does not allow you to embed geospatial information, like TIFF.

Is there an alternative to TIFF that allows a more compressed format, and still allows for the geospatial information to be embedded into the image (so we only have to work with a single file)?

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As commented by @user30184:

Tiff format does not need to be uncompressed so it is not right to say "they are extremely large, due to the TIFF format". You can select your favorite compression method, for example LZW or DEFLATE for lossless compression, or JPEG for lossy, but more effective compression. You are also wrong when you write about JPEG2000 "this image type does not allow you to embed geospatial information". There is even an OGC standard about that http://www.opengeospatial.org/standards/gmljp2.

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