Beat the butter with an electric mixer at medium speed until fluffy. Add powdered sugar 1/2 cup at a time, allowing it to become well combined before adding the next 1/2 cup.
Once all of the powdered sugar has been added, add vanilla and milk. Continue beating until well combined and fluffy.
If frosting seems too thick, add an additional tablespoon of milk.
Place the decorated marshmallow halves on top of the frosting like bunny ears.
Store in airtight container in refrigerator until ready to serve.