Resize the photo first. In some type of photo-editing software, choose "resize" or something similiar, make sure the "preserve aspect ratio" box is checked, otherwise your image will distort like crazy when you try to resize it. Then take the LARGEST dimension (height or width) and bring it down to 125 PIXELS. Not inches or centimeters. If your picture is not perfectly square, it will make the other dimension smaller than 125, but that's okay. After you've done that, then SAVE the image with the new dimensions. Then you should be able to add it as an Avatar.
I've been using IrfanView as my photo editing software for years. It's quick, easy, and it's free to download. You can even play most audio files in it and some movies. It's been rated as one of the best photo processing programs many times.
If that is too complex or you don't know how to do it, just PM me and I'll resize it for you and send it back to you via email and then try it.