1. Bring milk, powdered milk, sugar and cornstarch to boiling in saucepan over medium-low heat, stirring constantly, until thickened, 15 to 20 minutes. Remove from heat; add vanilla. Strain into bowl. Place plastic wrap directly on surface of pudding. Chill until cool, about 1 hour. Fold in 1 cup topping.
2. Place cranberry sauce in food processor or blender. Whirl until smooth. Fold in remaining whipped topping. In 8 parfait glasses, alternate layers of pudding and cranberry sauce. Chill.