Line two large baking sheets with parchment paper and set aside. Pour the rice cereal into a very large mixing bowl.
Combine white chocolate chips, cookie butter, and butter in a large microwave-safe bowl. Microwave on 50% power in 30-second intervals, stirring thoroughly after each burst, until completely melted and smooth (about 2-3 minutes total).
Stir the vanilla extract into the melted chocolate mixture until evenly combined.
Pour the white chocolate mixture over the cereal and gently fold with a rubber spatula until every piece is evenly coated. Work quickly but carefully to avoid crushing the cereal.
Spread the coated cereal onto the prepared baking sheets in a single layer. Let cool for 2-3 minutes until no longer hot to the touch but still slightly warm.
Transfer half of the cereal mixture to a large ziplock bag. Add 1 cup of powdered sugar, seal the bag, and shake vigorously for 30-60 seconds until completely coated. Repeat with remaining cereal and powdered sugar.
Spread the sugar-coated puppy chow back onto the parchment-lined baking sheets in a single layer. Let cool completely at room temperature for 30 minutes before transferring to an airtight container.
