Switch Toolbox is a tool primarily used for extracting, modding, and converting files and archives from various Nintendo games. However, the tool does have support for other formats such as Sonic 4's DDS files.
Switch Toolbox can easily convert Sonic 4's DDS files (this tool does not work with the non-standard DDS files found in the mobile version of Sonic the Hedgehog 4: Episode II (these files have a "KTX" header)). Switch Toolbox can be downloaded from the GitHub page.
To convert a DDS file to another format (like PNG), double-click the DDS file in Switch Toolbox, right-click the file and select "Export" (or press the shortcut CTRL + E while the file is highlighted), then save it anywhere.
The Sonic 4 Bonus Site is not associated with SEGA, Sonic Team, or Dimps.