<?php $orig_post = $post;
    global $post;
    $categories = get_the_category($post->ID);
    if ($categories) {
    $category_ids = array();
    foreach($categories as $individual_category) $category_ids[] = $individual_category->term_id;

    $args=array(
    'category__in' => $category_ids,
    'post__not_in' => array($post->ID),
    'posts_per_page'=> 2, // Number of related posts that will be shown.
    'caller_get_posts'=>1
    );

    $my_query = new wp_query( $args );
    if( $my_query->have_posts() ) {
    echo '<div id="related_posts"><h3>Related Posts</h3><ul>';
    while( $my_query->have_posts() ) {
    $my_query->the_post();?>

    <li><div class="relatedthumb"><a href="<? the_permalink()?>" rel="bookmark" title="<?php the_title(); ?>"><?php the_post_thumbnail(); ?></a></div>
    <div class="relatedcontent">
    <h3><a href="<? the_permalink()?>" rel="bookmark" title="<?php the_title(); ?>"><?php the_title(); ?></a></h3>
    <?php the_time('M j, Y') ?>
    </div>
    </li>
    <?
    }
    echo '</ul></div>';
    }
    }
    $post = $orig_post;
    wp_reset_query(); ?>

http://www.wpbeginner.com/wp-themes/how-to-add-related-posts-with-a-thumbnail-without-using-plugins/

Insert inside the loop

Related Posts by Category (with images)

wordpress

PHP