Welcome to iMore! For best contact photo results, enter them into the contact manually from your camera roll. Use photos with a decent resolution size. 200x200 may be too small. 960x960 would look better. Is this blurry problem new? Have the ones that look blurry ever looked ok full screen? Do all contact's photos look blurry, or just one or two?
Sent from my ancient but trustworthy iPhone 5.