Try a hard reset - press and hold the power and home button at the same time until the apple appears. Then release and let the system reload. This often takes care of random weirdness. You might have to re-select the photo you want with the contact. After the phone is back to normal, check you contact.
Another option would be to click the photo in the Contact listing and replace it there. Or if this didn't work, go into your photos file and "select" the photo you want and assign it to a contact from the options at the bottom of the screen. You might have to scroll sideways in those options to find that one.