As reported by engadget,
You no longer have to fire up your computer if you want to give your Spotify playlist a better cover image than a jumble of album art. Spotify has added support for uploading custom playlist images through its Android and iOS apps. Once you’ve created your digital mixtape, you can tap the “…” button, Edit and Change Image to slip in your preferred picture.
The feature is available now to both free users and Premium subscribers. This is most helpful if you primarily listen to Spotify on your phone, but there could be advantages even if you’re comfortable with grabbing pictures on your PC. You could create a playlist that not only reflects your current mood, but grace it with a phone photo to show what you saw (or what you looked like) at the time. Think of it as capturing the zeitgeist of a playlist, not just adding a personal touch.