My ruby version is
ruby 1.9.3p374 (2013-01-15) [i386-mingw32]
and I am running under Windows 8 with mingw installed.
How can I upgrade
Just install ruby version 2.0 from the official rubyinstaller site.
There's nothing like 'upgrade'. You can actually run both versions on ur PC at the same time (many people prefer that too). Also refer to this question: How to have multiple versions of Ruby AND Rails, and their combinations on Windows?