From my understanding, photos weren't printed on cloth until the early 20th century. I have this patch of cloth with a photo of Abraham Lincoln on it, with a note claiming it's from the possessions of my great-great Grandfather, who fought in the civil war. That would date this patch to the 1860s. Is that even possible? I'd like to find out more about it, but google searches have turned up empty.
What you appear to have here is a political campaign ribbon depicting Lincoln from the famous 1860 Cooper Union portrait.
The image depicted in your cloth is not actually a photo, but an illustration, specifically, the same illustration seen here.
While I'm not sure of when photographic printing directly to cloth was first used, lithographic printing of illustrations on cloth was quite common for presidental elections back as far as the late 1820's, as seen by these Andrew Jackson Ribbons.
For more on political ribbons, possibly even including the one you have here, see American Political Ribbons and Ribbons Badges 1825-1981, by Sullivan, Edmund B. and Fischer, Roger