Line an 8 inch square baking pan with aluminum foil, and grease the foil.
Combine the vanilla chips and sweetened condensed milk in a saucepan over medium heat. Stir frequently until almost melted, remove from heat and continue to stir until smooth. When chips are completely melted, stir in the peppermint extract, food coloring, and candy canes.
Spread evenly in the bottom of the prepared pan. Chill for 2 hours, then cut into squares.