Artificial Intelligence (AI) promises to fundamentally transform society but faces multiple challenges in doing so. In particular, state-of-the-art neuromorphic devices used to implement AI typically lack processes like neuromodulation and neural oscillations that are critical for enabling many advanced cognitive abilities shown by the brain. Here, we utilize smart materials, that adapt their structure and properties in response to external stimuli, to emulate the modulatory behaviour of neurons called neuromodulation. Leveraging these materials, we have designed and simulated the dynamics of a self-adaptive artificial neuron, which comprises five magnetic skyrmions hosted in a bilayer of thulium iron garnet (TmIG) and platinum (Pt). Micromagnetic simulations show that both the amplitudes and frequencies of neuronal dynamics can be modified by reconfiguring the skyrmion lattice, thereby actualizing neuromodulation. Further, we demonstrate that this neuron achieves a significant advancement over state-of-the-art by realizing the advanced cognitive abilities of context-awareness, cross-frequency coupling as well as information fusion, while utilizing ultra-low power and being ultra-compact. Building advanced cognition into AI can fundamentally transform a wide array of fields including personalized medicine, neuro-prosthesis, human-machine interaction and help realize the next-generation of context-aware AI.