My development cycle generally results in new updates approximately once every two or three months; this year, I updated in january, march, june, and august, and plan to have another fairly large update in october.
I don't think there's a single optimal release frequency, but there are two things to keep in mind: how sustainable the pace of work is, and the balance between size and frequency. A site could release one massive update every year or a tiny one every week and still end up with the same rate of new content in the long run.
If a site is well-established, adding new content to existing systems (a new outfit for pets, a new type of food that has only minor differences from existing ones, a new trait for an existing species, etc) can happen frequently, although I wouldn't do it more than twice a month to avoid overwhelming users and to avoid artist burnout, but while a site is still in its infancy, these kinds of cosmetic updates may need to take a back seat to systems development, especially if the same people are working on art and programming. For example, I want my site to add a handful of new "standard" (i.e. not event-specific) pets about once a year in the long run, but until there are enough distinct species in circulation, it would be nice to have even more frequency than that, maybe adding them as often as quarterly. However, because I'm still working on many of the core features, new species have been taking a back seat, and as we're coming up on the one-year anniversary of the closed alpha test, only about half the total art needed to introduce the second batch of species is done because I've been busy drawing achievement badges instead.
One related question that I have been asking myself is: is it better to bundle many unrelated features into one update, or to have multiple smaller updates? I've found that working on multiple things in parallel is easier, since if I get blocked on one thing I can pivot to another, or alternate between programming-heavy, art-heavy, and design-heavy tasks. But I also wonder if it would be better for the community to receive more frequent updates even if each one has less new content and systems.