How to add a option in wysiwyg editor so that blocks can be selected as images? Using the Wysiwyg module, we are able to add an image. Is there any way so that I am able to view my blocks in it as well as assign those blocks in any place inside a page?
Seems you will need to write your own plugin. There are dozens of manuals, like Creating a CKEditor Plugin with a Custom Dialog Window - this one seems to be good for you, as you might want to have dialog window to allow user select a block.

You will need tips from this Drupal.org thread to


get list of blocks you will feed to the editor
make block data avaliable in node.tpl.php via preprocess function
render the block in a node, probably using custom created, block enabled text filter.


Don't forget to consider security issues when deciding who should be able to add what.

Last but not least, publish your module on Drupal.org for future developers.