Connecting 4-20mA signal to esp8266 ADC circuit
A major drawback of your approach is that it requires calibration. Unless the potentiometers are set correctly, your output will not be correct according to the formula that gives

1 V output for 20 mA input
200 mV output for 4 mA input

An alternative approach, that does not require calibration is:



simulate this circuit &ndash; Schematic created using CircuitLab
Of course the accuracy of the circuit will depend upon the accuracy of the resistor, and the the offset voltages of the op-amp. If these do not give you sufficient accuracy, then a circuit that requires calibration may be your best option. However, calibrating from within your micro-controller, as opposed to using potentiometers, is an option you should consider.

Addendum:

Is there any standard for the lowest value we can pick for loop resistance?

I am not sure that this would be necessary, but if one of your objectives is to ensure that the current loop has at least 250\$\Omega\$ load, the following will work.



simulate this circuit