As I understand your question, you want to place a whole smaller photo on top of a larger one. If that is the case, you can simply drag and drop the smaller photo over the larger one from the Photo Bin. The dragged photo will come into the image as a new layer and you can resize and move it using the Move tool.
Or if you prefer to use hatstead's method, you can select the whole smaller photo using Select>All (Ctrl+A) and paste it in the second larger image.
One advantage of using the Photo Bin click and drag method is that the layer becomes a "Smart Object" and moving and resizing the layer will not degrade its resolution. Also, the Smart Object comes in resized to the center of the larger photo, even if the resolution of the image is greater than the background image. Using the copy and paste method, a higher resolution smaller image will fill the background image and it can be more difficult to resize it.