Although there are many Image hosting sites like Photobucket & TinyPic but its better that you use your very own Blogger to upload the desired image.
To upload blogger image follow these steps.
1- Log in to your Blogger account click New Post button to create a new post.
2- In the new post click the image icon and add an image to display in the post
3- Once your image is uploaded,switch to HTML from compose.
4. Find the following code
The above code tells where your image is saved in the blogger.You can use it in blogger posts as backgrounds.