Beat together butter and sugar until creamy. Blend in egg, vanilla and peppermint extract. Sift together flour, baking powder and salt; gradually add to creamed mixture. Stir in oats. Roll out dough between 2 sheets of waxed paper to form a 12x6-inch rectangle. Refrigerate several hours or overnight.
Preheat oven to 375°F. Remove top sheet of waxed paper from dough. Cut into 6x¼-inch slices. Shape into ropes, twisting to form candy canes. Bake on ungreased cookie sheets 8 to 10 minutes. Cool on cookie sheets 1 minute before removing to wire racks. Decorate with confectioners’ sugar frosting and cinnamon candies.