In medium bowl, mix pudding and milk; set aside and allow to thicken.
In large bowl, beat cream cheese and vanilla until smooth. Add pudding and mix well. Fold in whipped topping.
**note** You may want to experiment with this, using a large box of the pudding and adjusting the milk amount to give a thicker consistency so that the frosting holds its thickness. Once I try this myself, I'll post my adjustments**