How can I convert this map to KML/KMZ format and open it on Google Earth?
Google Earth itself will give you an excellent georeferencing experience.
Go to menu
Add and select
Image Overlay. Select your image in the
Link field (by clicking on Browse button).
You can control green handles on and around the image to fit it to desired location. Then hit OK to finish.
To save it as a new
kmz file, go to
Places panel and right click on the layer, then
Save Place As....