In a large bowl combine the butter and powdered sugar and mix well.
Add in the peppermint extract and flour and mix until a dough forms.
Wrap the dough and refrigerate at least 30 minutes or up to 24 hours.
When ready to bake the cookies preheat the oven to 350 degrees.
Remove the dough from the refrigerate and scoop with a one inch cookie scoop onto cookie sheets, two inches apart.
Bake for 9-11 minutes or until the edges just begin to brown.
Remove from oven and cool for 1 minute on the baking sheets before removing them to cool completely on the wire racks.
To make the frosting combine the butter and milk. It may look curdled but don't worry, it'll come together.
Add in the peppermint extract and food coloring and mix well.
Stir in the powdered sugar.
Spread the frosting on each of the cookies and sprinkle with the crushed candy canes.