You can use
InfranView program to save the .dds icons into .png, and you can convert the .png formatted files with
Button Manager to .blp format. Sadly I can't do it for you - lack of time - but hope the method that I mentioned gonna help you out.
I also want to highlight for you, that the reason why I started to use .dds files, is: because somehow when .png/whatever icon is converted into .blp: it decreases the quality of the icon. I understand, that the world editor only handles .blp format, but when you convert it, be aware of this probability. Because I met this problem, and I can't figure it out myself what's the issue here.