Here some small snippet class which allows you to use auto scaled image.
import gtk
class ImageEx(gtk.Image):
    pixbuf = None
    def __init__(self, *args, **kwargs):
        super(ImageEx, self).__init__(*args, **kwargs)
        self.connect("size-allocate", self.on_size_allocate)
    def set_pixbuf(self, pixbuf):
        """
        use this function instead set_from_pixbuf
        it sets additional pixbuf, which allows to implement autoscaling
        """
        self.pixbuf = pixbuf
        self.set_from_pixbuf(pixbuf)
    def on_size_allocate(self, obj, rect):
        # skip if no pixbuf set
        if self.pixbuf is None:
            return
        # calculate proportions for image widget and for image
        k_pixbuf = float(self.pixbuf.props.height) / self.pixbuf.props.width
        k_rect = float(rect.height) / rect.width
        # recalculate new height and width
        if k_pixbuf < k_rect:
            newWidth = rect.width
            newHeight = int(newWidth * k_pixbuf)
        else:
            newHeight = rect.height
            newWidth = int(newHeight / k_pixbuf)
        # get internal image pixbuf and check that it not yet have new sizes
        # that's allow us to avoid endless size_allocate cycle
        base_pixbuf = self.get_pixbuf()
        if base_pixbuf.props.height == newHeight and base_pixbuf.props.width == newWidth:
            return
        # scale image
        base_pixbuf = self.pixbuf.scale_simple(
            newWidth,
            newHeight,
            gtk.gdk.INTERP_BILINEAR
        )
        # set internal image pixbuf to scaled image
        self.set_from_pixbuf(base_pixbuf)
And small usage example:
class MainWindow(object):
    def __init__(self):
        self.window = gtk.Window()
        self.window.connect("destroy", gtk.main_quit)
        # create new ImageEx
        self.image = ImageEx()
        # set size request, to limit image size
        self.image.set_size_request(width=400, height=400)
        # load image from file, change path with path of some of your image
        pixbuf = gtk.gdk.pixbuf_new_from_file("path/to/your/image.jpeg")
        # that's the key moment, instead `set_from_pixbuf` function
        # we use our newly created set_pixbuf, which do some additional assignments
        self.image.set_pixbuf(pixbuf)
        # add widget and show window
        self.window.add(self.image)
        self.window.show_all()
if __name__ == '__main__':
    MainWindow()
    gtk.main()