Yes, and that works whether the site is just sitting on your own computer or has been uploaded to the web.
As felgall said, it's all a question of where the image is in relation to the CSS file requesting it. So, let's say your main root folder contains a file called styles.css and an /images/ folder with the myphoto.jpg image in it. In that circumstance, you would use the link that felgall gave, i.e.
But if you styles.css file is inside a /css/ folder itself, that link won't work. The link would then be
The dots at the start mean 'go up one folder first'. So this assumes that the /css/ folder is in the main root folder, as the /images/ folder is.
Once you have this all set up, you can just double click on your web page file (e.g. index.html) and it will open in your browser. What you see in your browser is still a URL, even though it's just a messy looking location on your own computer.