The Verge writes users will be able to send "HD quality" photos with a resolution of up to 4096 x 2692 pixels. WABetaInfo has some screenshots of how it works in WhatsApp version 22.214.171.124 for iOS and version 126.96.36.199 for Android:
In the example shown by WABetaInfo, the “photo quality” menu appears after tapping the HD icon. It gives two resolution options: standard quality (1600 x 1052) and HD quality (4096 x 2692). Meta hasn’t mentioned specifics about how compressed the images will be overall and how they will look when compared to sending images over Apple’s iMessage or any other competing platform. The higher-quality images will fall under the same WhatsApp end-to-end encryption defaults, too.By default, photos will continue to be send using the standard quality option. A similar option for sending higher-resolution video via WhatsApp is also said to be in the works, this will follow at a later point.