In stand mixer or if using hand mixer, beat butter for 1 minute. Add egg and vanilla; beat for another 2 minutes.
Add in all dry ingredients except for candy canes. Beat until the dough starts to come together, for about 1 minute. Form into ball; knead once or twice until smooth.
Wrap dough in plastic wrap and let rest in the fridge for 1 hour. While dough is resting, finely chop up your candy canes for later.
Roll dough by 1 tbsp into 20 balls.
Place, about 1-inch apart, on parchment paper-lined baking sheet. Press a thumb mark in the middle of each ball about halfway down to form wells.
Bake in a preheated oven at 350°F (175°C) until no longer shiny, about 6-8 minutes.
When cookies have just come out of the oven, sprinkle each thumbprint well with candy cane pieces. Let cool and enjoy.