Below the message text area you will see a section titled " Additional Options"
Click on the Manage attachments button, see pic
This will open a popup, see pic
addfiles2.jpg
If you wish to upload the file from your computer click on Add File in the top right, then click on Select file in the new popup, locate the file on your computer via the new popup then click on open, then click on Upload files.
The image will be added to the bottom section of the popup, make sure the tick box is selected in the bottom right of the image you wish to add.
Then click on Upload inline or done.