Line a 9x9 inch baking dish with parchment paper and set it aside.

In a medium saucepan, combine the evaporated milk, sugar, and salted butter. Cook over medium-high heat until the mixture starts to simmer.

Allow the mixture to simmer for 5 minutes, stirring continuously to avoid burning.

Remove the saucepan from the heat and immediately add the white chocolate chips. Stir until melted and well combined.

Mix in the mini marshmallows, then return the saucepan to medium-low heat.

Stir until all the marshmallows have completely melted into the mixture.

Pour in the peppermint extract and mix well. Add half of the crushed candy canes and combine until fully incorporated.

Pour the fudge mixture into the prepared baking dish and smooth out the top. Sprinkle the remaining crushed candy canes on top.

Let the fudge cool and set for about 4 hours until firm. Once set, lift it out of the baking dish and cut into 1-inch squares.