Best way to convert PHP block to improve site
Just make them a custom module!

The best start I can think of would be taking block_example.module from the Examples for Developers project as a start. Rename it, of course, and then just define your blocks in it, the way example blocks are defined. For blocks' content - move code from where it is now to appropriate functions.

That's pretty much all, if you will have more specific question during development, ask it, too.

Understanding the hook system for Drupal modules might be a useful read, too.