Favicon (Favorites Icon) is the small picture (usually 16px x 16px in size) you see beside some some site's name in your browser's address bar.

To add/change your favicon follow the below steps:

Step1: Log in blogger & go to your blog.
Step2: Now click layout


































 Step3: Then click Edit on the “Favicon” above the navbar.
Step4: After you have selected favicon image, click Save button. Blogger will automatically resize and upload the selected favicon image to your blog.




Your new favicon should start appearing in some time. If the favicon on your Blogger blog does not update, make sure you clear all history from web browser and then check for it.
Source: beginnerworld.blogspot.com