Can we add an image to the email template?
If so could you please guide me to how to add an image in email template .

Sure, it's possible. You can do it with typical <img> tag.

Thanks for your update but what will be the src and where to upload the image
<img src="img_girl.jpg" alt="Girl in a jacket" width="500" height="600">

Wherever you want. You can use external URL, you can upload pictures to wwwroot/content/images/uploader by TinyMCE uploader in GrandNode.