From the People application  , select the contact for whom you want to add or edit the picture.

Once the page of the contact is open, select Edit in the Menu  or directly press  if available. You will be able to edit here all the information concerning your contact. 

For the photo, press  or the existing photo. You can choose to take a photo with your device camera if available or select the photo among the ones of your gallery. 

Note that this feature is not available for the contacts located onto your SIM card.