1.Login to your blogger dashboard--> layout- -> Edit HTML

2.Scroll down to where you see </head> tag .

3.Copy below code and paste it just before the </head> tag .

<script src='https://ajax.googleapis.com/ajax/libs/jquery/1.6.4/jquery.min.js' type='text/javascript'/>
<script type='text/javascript'>
$(document).ready(function(){

$(&quot;ul.subnav&quot;).parent().append(&quot;<span/>&quot;); //Only shows drop down trigger when js is enabled - Adds empty span tag after ul.subnav

$(&quot;ul.topnav li span&quot;).click(function() { //When trigger is clicked...

//Following events are applied to the subnav itself (moving subnav up and down)
$(this).parent().find(&quot;ul.subnav&quot;).slideDown(&#39;fast&#39;).show(); //Drop down the subnav on click

$(this).parent().hover(function() {
}, function(){
$(this).parent().find(&quot;ul.subnav&quot;).slideUp(&#39;slow&#39;); //When the mouse hovers out of the subnav, move it back up
});

//Following events are applied to the trigger (Hover events for the trigger)
}).hover(function() {
$(this).addClass(&quot;subhover&quot;); //On hover over, add class &quot;subhover&quot;
}, function(){ //On Hover Out
$(this).removeClass(&quot;subhover&quot;); //On hover out, remove class &quot;subhover&quot;
});

});
</script>
<style type='text/css'>
ul.topnav {
list-style: none;
padding: 0 20px;
margin: 0;
float: left;
width: 100%;
background: #222;
font-size: 1.2em;
background: url(http://1.bp.blogspot.com/_4HKUHirY_2U/SuvG9uqdygI/AAAAAAAAAGg/RGkds76x-Ks/topnav_bg.gif) repeat-x;
}
ul.topnav li {
float: left;
margin: 0;
padding: 0 15px 0 0;
position: relative; /*--Declare X and Y axis base--*/
}
ul.topnav li a{
padding: 10px 5px;
color: #fff;
display: block;
text-decoration: none;
float: left;
}
ul.topnav li a:hover{
background: url(http://2.bp.blogspot.com/_4HKUHirY_2U/SuvHEn2GZ9I/AAAAAAAAAGo/s4ncczdnOd0/topnav_hover.gif) no-repeat center top;
}
ul.topnav li span { /*--Drop down trigger styles--*/
width: 17px;
height: 35px;
float: left;
background: url(http://2.bp.blogspot.com/_4HKUHirY_2U/SuvHKqBeOXI/AAAAAAAAAGw/qGYlY4ckLWc/subnav_btn.gif) no-repeat center top;
}
ul.topnav li span.subhover {background-position: center bottom; cursor: pointer;} /*--Hover effect for trigger--*/
ul.topnav li ul.subnav {
list-style: none;
position: absolute; /*--Important - Keeps subnav from affecting main navigation flow--*/
left: 0; top: 35px;
background: #333;
margin: 0; padding: 0;
display: none;
float: left;
width: 170px;
-moz-border-radius-bottomleft: 5px;
-moz-border-radius-bottomright: 5px;
-webkit-border-bottom-left-radius: 5px;
-webkit-border-bottom-right-radius: 5px;
border: 1px solid #111;
}
ul.topnav li ul.subnav li{
margin: 0; padding: 0;
border-top: 1px solid #252525; /*--Create bevel effect--*/
border-bottom: 1px solid #444; /*--Create bevel effect--*/
clear: both;
width: 170px;
}
html ul.topnav li ul.subnav li a {
float: left;
width: 145px;
background: #333 url(http://3.bp.blogspot.com/_4HKUHirY_2U/SuvHPYoc82I/AAAAAAAAAG4/3DDzBwklYpw/dropdown_linkbg.gif) no-repeat 10px center;
padding-left: 20px;
}
html ul.topnav li ul.subnav li a:hover { /*--Hover effect for subnav links--*/
background: #222 url(http://3.bp.blogspot.com/_4HKUHirY_2U/SuvHPYoc82I/AAAAAAAAAG4/3DDzBwklYpw/dropdown_linkbg.gif) no-repeat 10px center;
}
#header img {
margin: 20px 0 10px;
}
</style>

Note:
Please host image yourself.
You can change width,height,color,... as your choice.

4.Now go to Layout-->Page Element and click on "Add a gadget".

5.Select "html/java script" and add the code given below and click save.

<ul class="topnav">

<li><a href="#">Home</a></li>
<li>
<a href="#">Tutorials</a>
<ul class="subnav">
 <li><a href="#">HTML Tutorials</a></li>
 <li><a href="#">CSS Tutorials</a></li>
 <li><a href="#">PHP Tutorials</a></li>
 <li><a href="#">SQL Tutorials</a></li>
 <li><a href="#">jQuery Tutorials</a></li>
</ul>
</li>
<li>
<a href="#">Templates</a>
<ul class="subnav">
  <li><a href="#">1 Column</a></li>
  <li><a href="#">2 Column</a></li>
  <li><a href="#">3 Column</a></li>
  <li><a href="#">4 Column</a></li>
  <li><a href="#">Premium</a></li>
  <li><a href="#">Buy Now</a></li>
 </ul>
</li>
<li><a href="#">About Us</a></li>
<li><a href="#">Advertise</a></li>
<li><a href="#">Subscribe</a></li>
<li><a href="#">Contact Us</a></li>

</ul>

It will look like this: