Upload an image or photo you want to use in your signature to an online hosting website. Any image or photo you use must first be uploaded and accessible at an online hosting website
Go to the picture at the host site in a browser, right-click, and then select Copy from the menu
Position the cursor in the signature box where you want the image to appear
Right-click and select Paste to place the image in the signature box
Select the image and click on the hyperlink icon of the signature format toolbar
Enter the desired hyperlink URL in the Address field and click save
Open a new email in Yahoo to view your email signature
See the full guide here