What you are looking for is called a vignette blur.
Nik software color efex pro filter collection has a vignette blur that is easy to adjust. Or, if you have CS6, you can do the same with this
tutorial.
Alternatively, there are probably a few hundred free photoshop actions to give a pinhole effet or a vignette blur. For example,
here. Since they normally use a fixed mask to control the extent of the sharp center, they are usually more difficult to adjust. The trick would then be to make a few masks yourself.
The classical way of obtaining this effect is to use a clear filter in front of the lens and smear vaseline on its edges.