How does Chrome choose the thumbnail for frequently visited websites?

The thumbnails you're looking for are stored in a cache in the Chrome User Data folder, which is located at

%LOCALAPPDATA%\Google\Chrome\User Data\Default\                       (Windows)
/users/[username]/library/application support/google/chrome/default   (OSX)
/home/<user>/.config/google-chrome/default                            (Ubuntu)

Just delete the Thumbnails file. Once that's done, revisit each site you care about to make Chrome generate a new thumbnail for that site.

Info from this HowToGeek post.

Often Chrome doesn't update the thumbnails and seems to "stuck" at old ones. A simple way to improve your access is the extension "Speed Dial 2".

It is also possible to refresh the thumbnails. But its very frustrating to do it over and over again. Because chrome won't "learn".