Simply tap the "+" and choose form Photo Library. If you choose a still photo, it will show in your video for 5 seconds. You can adjust this amount of time by tapping on the photo on your video timeline, then the "..." menu within the photo.
If you add a Live Photo to your timeline, it will show as a video with the entire Live Photo as the video clip. You can tap on the Photo, then "..." to convert a Live Photo "clip" to a still photo.