In order to display sender image go to:
Settings and accounts -> General ->
Then check the box next to "Sender Image (avatar)".
Please notice that images will only be displayed for:
1. Contacts that exists on your device.
2. Exchange: contacts that were synced with your account - if you checked the box next to "sync contacts" (via MailWise).
3. Gmail: contacts that were synced with your account if your Gmail account was added to your device's accounts (via device's properties).