Heat oven to 350°F. Pour sprinkles into a shallow bowl. Unwrap Hershey's Hugs and set aside.
Combine butter, sugar and ½ teaspoon vanilla extract in a mixer bowl. Beat at medium speed, scraping bowl often, until creamy.
Place 2 inches apart onto ungreased cookie sheets. Bake 14-18 minutes or until bottoms are lightly browned.
Remove from oven and let cool for a minute or two then quickly place a Hershey's Hug in the center of each cookie, barely pressing down (about ¼ inch or less!) into the cookie. Don't be tempted to press the kiss too deeply into the cookies as they will crack at the edges. If you do have any cracking, gently push the crack back together while the cookies are still warm. To keep the kisses from melting, transfer cookies to a plate or small cutting board and refrigerate for 20 minutes. If you don't refrigerate them, the kisses will take quite a while to firm up. Be careful when you move them so the kisses don't collapse or distort in shape from the movement.
Adapted from Land O'Lakes