How to detect letters in an image?
The field is knows as Optical Character Recognition (OCR) and it's a broad field.

Since it's clearly an academic exercise, you can keep it simple. Start by image segmentation : find shapes where a shape is just a set of connected pixels. [1] Then compare the shapes to known shapes. Don't expect an exact match, do an approximate match. What overall properties can you reliably determine for the shape? Aspect ratio? Holes in the middle?

[1] At this point, you can already draw circles around each shape that's not too big nor too small.