1.Log in to your Dashboard - Template -  Edit HTML
2.Click on "Expand Widget Templates"
3.Search ( CTRL +F ) </head> tag.
4.Now add below code just before </head> tag. 

    <b:if cond='data:blog.pageType != &quot;static_page&quot;'> 
<script type='text/javascript'>var thumbnail_mode = &quot;no-float&quot; ;
summary_noimg = 300;
summary_img = 300;
img_thumb_height = 172;
img_thumb_width = 172;
</script>
<script type='text/javascript'>
//<![CDATA[
function removeHtmlTag(strx,chop){
if(strx.indexOf("<")!=-1)
{
var s = strx.split("<");
for(var i=0;i<s.length;i++){
if(s[i].indexOf(">")!=-1){
s[i] = s[i].substring(s[i].indexOf(">")+1,s[i].length);
}
}
strx = s.join("");
}
chop = (chop < strx.length-1) ? chop : strx.length-2;
while(strx.charAt(chop-1)!=' ' && strx.indexOf(' ',chop)!=-1) chop++;
strx = strx.substring(0,chop-1);
return strx+'...';
}

function createSummaryAndThumb(pID){
var div = document.getElementById(pID);
var imgtag = "";
var img = div.getElementsByTagName("img");

if(img.length<=0) {
imgtag = '<span style="float:left; padding:0px 10px 5px 0px;"><img src="http://img90.imageshack.us/img90/3534/unled1pl.jpg" width="'+img_thumb_width+'px" height="'+img_thumb_height+'px"/></span>';
var summ = summary_noimg;
}

if(img.length>=1) {
imgtag = '<span style="float:left; padding:0px 10px 5px 0px;"><img src="'+img[0].src+'" width="'+img_thumb_width+'px" height="'+img_thumb_height+'px"/></span>';
summ = summary_img;
}

var summary = imgtag + '<div>' + removeHtmlTag(div.innerHTML,summ) + '</div>';
div.innerHTML = summary;
}


//]]>
</script>
</b:if>

    Note : You can change the blue lines values as your choice. The summary_noimg and summary_img values represent the number of characters the post will have; the img_thumb_height is the height of the image and img_thumb_width is the width of the image.

    5.Now search this: 

    <data:post.body/>

    6.Replace above code with below code. 


     <b:if cond='data:blog.pageType == &quot;item&quot;'>
<data:post.body/>
<b:else/>
<b:if cond='data:blog.pageType == &quot;static_page&quot;'>
<data:post.body/>
<b:else/>
<div expr:id='&quot;summary&quot; + data:post.id'>
<data:post.body/>
</div>
<script type='text/javascript'>
createSummaryAndThumb(&quot;summary<data:post.id/>&quot;);
</script>
<div style='clear: both;'/>
<span style='padding-top:5px;;float:right;text-align:right;'><a expr:href='data:post.url' rel='bookmark'><b>Read more</b></a></span>
</b:if>
</b:if>

    7.Now save your template and you are done.