help in reading a large text file using verilog....

Typically in image processing you use "stream oriented" processing and not "buffer oriented" processing.

You seam to think in terms of buffers, one buffer is 100 pixels, you process it and then move on to the next buffer. It is a nice approach for typical processors, but not for FPGAs.

In FPGAs you can do many operations in parallel, and therefore it is better to think in streams, one stream is a sequence of pixels. you fetch a pixel, process it, and store it back all at the same time in the FPGA (aka pipelining).

So back to you question, how do you read large images ? Read it pixel by pixel. After all The simulation can be slow, the hardware will be fast anyways.

Try reading on "Avalon streaming interfaces", you will get my point.