High Quality Preview not working.

scottmosher  wrote The Photoshop file is 18x12 at 300dpi.

That's a sizable preview to render. Any chance your available system resources aren't up to the task? (Is Photoshop still running with that same image open?)

The InDesign file even with High Quality Preview set to ON, isn't showing that high quality of a preview.

Well, while I'd concede that your screenshot does show a lower quality preview than anyone would expect from High Quality preview mode, it bears mentioning that InDesign's dedicated proxy image is not your image, and cannot be a basis for general quality judgements.

High Quality Preview seems not to be working for me.

To draw that generalized conclusion, it would have to be this slow to redraw every image. Is that the case, or is it just this one?

Btw, when the PDF is exported the resolution is fine, though.

At least that confirms it's only a display issue. (My first impulse was to ask: Then, why does it matter? But of course whether it matters to you is not up to me.)

First of all I assume that the first image is actually the InDesign and the second the Photoshop view. Try turning off GPU Performance in InDesign preferences and see if that makes a difference.