Add the milk, yogurt, and sweetened condensed milk to the Instant Pot. Whisk until the mixture is very thoroughly combined.
Place a lid on the pot. You can use the Instant Pot lid (steam release valve set to venting) or a glass lid. Note: If your sealing ring has a strong smell to it, I recommend removing it (you don't need it for this recipe because you are not pressure cooking), or you could swap it out for a ring that has no smell. The smell can and will get into your yogurt. I just use a glass lid that fits the pot.
Select the YOGURT function and make sure it is on NORMAL, and set the time to 8 hours (for a milder yogurt) or 9 hours (for a tangier yogurt).
When the time has finished, the Instant Pot will say YOGT. Carefully remove the lid (there will be condensation on the lid, so just gently remove it so as to not get a lot of water dripping down into your yogurt).
Remove the liner pot from the Instant Pot, cover it with a paper towel (this helps to stop any condensation that forms on the lid not drip down onto your yogurt), and then cover the pot (a glass lid or even a plate works fine). For best results, do not stir the yogurt until it has chilled.
Place the pot in the refrigerator until thoroughly chilled (I leave mine to chill for at least 8 hours).
Add the vanilla extract and stir to combine. Enjoy!
Store your yogurt, covered, in the refrigerator. It should last for 1 to 2 weeks.