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How do you shrink a photo down to a certain size like 4.25 x 4.25?
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Image > Resize > Image size from the menu.
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You'll need to adjust utilize the Image Size feature from the Image menu in Photoshop. There, make sure that the chain is checked (or not depending on if the original image is already a square) and you can change the size of your image by plugging in your dimensions there.
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Just a couple of quick additions:
1. If you want to end up with a square document when using Image Size, you need to start with a square document.
2. When you link the width and height together -- the resolution will stay the same as the original document. If it started at 300 it will end at 300 (unless you physically change it.) The photo will shrink in size and you will lose those pixels.
3. When you link the width, height and resolution, the image will shrink, but the resolution will get larger -- meaning that you will reapportion the pixels -- there will be more pixels per inch than the original 300.
Let us know if you need any more help!