Internal linking contributes to the usability and search engine friendliness of a website in the following ways:
Whether text links or image links, internal linking creates an internal navigation system in a precise way. This helps both users and search engines find relevant and complementary content. If utilized in the right manner, internal links can help create a topic hierarchy that can assist search engines in better classification of content.
Internal links, especially text links, help push the link value from your home page deeper into your website, which can then translate into an improved ability of those secondary, tertiary, or even, deeper pages.