Line a square, 8” baking pan with greased aluminum foil.
In a saucepan over medium heat, combine the vanilla chips and sweetened condensed milk, stirring frequently.
When almost melted, remove from heat and continue to stir until smooth.
Stir in the peppermint extract and candy canes.
Spread evenly in the bottom of the prepared pan and chill for at least two hours.
Cut into squares and serve.