Pilot reported an NMAC in the traffic pattern on final approach to CRG airport with an aircraft doing a practice instrument approach directly above them.

Narrative

Aircraft X was being flown for the purpose of familiarizing myself with the airplane. I was the PIC (Pilot in Command) of the aircraft and was doing takeoff and landing practice at CRG. The event occurred in the final lap of the traffic pattern before my full-stop landing. After I called for a full-stop in the midfield; Craig Tower gives me the instructions to follow Aircraft Y on a short final and that I was to follow them as #2 for Runway 14. Besides that; the Tower Controller also mentioned that there is a Aircraft Z doing a practice approach and that they shouldn't be a factor. I turn my base leg with enough spacing for Aircraft Y ahead of us and so that I do not catch up to them on final. As I was turning my base leg to final; my Safety Pilot points out that the Bonanza was right on top of us and that they were a few hundred feet away. Since I was the PIC sitting in the left seat and the turn from base to final was a left turn; there is no way I could have seen Aircraft Z throughout the turn and thus only the Safety Pilot could point out the traffic. I pitch down to separate ourselves even more as Aircraft Z goes missed on the approach. From there; we continue our full-stop behind the Cessna and approximately 10 seconds after Aircraft Y takes off from a touch and go; we flare over Runway 14 for our landing. We trusted that the separation that Tower was giving us was sufficient initially. However; we will continue to emphasize proper scanning techniques while flying; especially in any traffic pattern operations.