You can use the following code to get the current state of the "editor" and the caret position, than insert an image.
Credits: Insert image in "contenteditable" div using popup
Code:
$(document).ready(function () {
$(".insert-image").on('click', function (event) {
event.preventDefault();
var x = document.createElement('img');
x.src = "http://nuclearpixel.com/content/icons/2010-02-09_stellar_icons_from_space_from_2005/earth_128.png";
insertNodeOverSelection(x, document.getElementById('field'));
});
function insertNodeOverSelection(node, containerNode) {
var sel, range, html, str;
if (window.getSelection) {
sel = window.getSelection();
if (sel.getRangeAt && sel.rangeCount) {
range = sel.getRangeAt(0);
if (isOrContainsNode(containerNode, range.commonAncestorContainer)) {
range.deleteContents();
range.insertNode(node);
} else {
containerNode.appendChild(node);
}
}
} else if (document.selection && document.selection.createRange) {
range = document.selection.createRange();
if (isOrContainsNode(containerNode, range.parentElement())) {
html = (node.nodeType == 3) ? node.data : node.outerHTML;
range.pasteHTML(html);
} else {
containerNode.appendChild(node);
}
}
}
function isOrContainsNode(ancestor, descendant) {
var node = descendant;
while (node) {
if (node === ancestor) {
return true;
}
node = node.parentNode;
}
return false;
}
});
Demo: http://jsfiddle.net/IrvinDominin/NBfCa/