Look at the following specific instruction to add and assign a photo to a iPhone contact in iOS.
From the Contacts App, tap on the targeted Contact you want to add an avatar photo to.
Tap on “Edit” button at the top left conner.
Tap on Add Photo, you then are able to select an existing photo or take a new photo to assign to the contact.
Done! You have just created successfully an avatar photo for a contact on your iPhone