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So currently my code is using a standard sha1 to hash the password for database implementation.
What is or is there a better more securing way to store the password? Maybe MD5 (Yes I am joking)
For example I am using Codeigniter as my framework, What would be the best way to encrypt the passwords?
You should really use bcrypt to hash your passwords, it was designed especially for hashing password.
Hash functions for passwords should be slow (need some computing time). Most hash algorithms like SHA-1 and MD5 or even SHA-256 are designed to be fast, but this makes it an easy target for brute force attacks.
Don’t be afraid to use bcrypt! It is not for high security sites only, and using it can be as easy, as using an md5 hash. It’s recommended to use a well established library like phpass, and if you want to understand how it works, you can read this article, where i tried to explain the most important points.