Preheat oven to 350° degrees F. Line 2 baking sheets with parchment paper or silicone liners; set aside. Meanwhile, mix the cinnamon sugar topping ingredients together in a small bowl; set aside.
In a large bowl of a stand mixer, cream together the butter and sugars until creamy and smooth, about 1 minute. Add in the egg, mixing well, followed by the egg yolk and vanilla, mixing well and scraping down the bottom and sides of the bowl as needed. Lastly, beat in the baking soda, salt, cinnamon, flour, milk powder, dry pudding mix and 2 cups of the crushed Cinnamon Toast Crunch cereal and mix on low speed until just combined.
Using a cookie dough scoop, drop Tablespoon-size balls of dough into the small bowl of the cinnamon sugar topping, quickly rolling the dough ball in it (does not need to be thoroughly coated). Place the dough balls 2" apart on the baking sheets.
Bake for 8-10 minutes, rotating pans halfway through baking time to ensure even baking, or until set. Allow cookies to cool briefly on the baking sheets, about 10 minutes, before carefully transferring to wire racks to cool completely. Store any cooled cookies airtight at room temperature. Note that the cereal will get increasingly softer in the cookies.