BEAT butter, sugar, dry pudding mix and egg in large bowl with mixer until well blended. Mix remaining ingredients. Gradually add to butter mixture, beating well after each addition. Refrigerate 1 hour or until firm.
HEAT oven to 350°F. Roll out dough on lightly floured surface to 1/4-inch thickness; cut into gingerbread shapes with 4-inch cookie cutter, rerolling trimmings. Place, 2 inches apart, on baking sheets sprayed with cooking spray. Use straw to make hole near top of each cutout.
BAKE 10 to 12 min. or until edges are lightly browned. Cool on baking sheets 3 min. Remove to wire racks; cool completely. Decorate as desired. Insert ribbon through holes to hang cookies on tree.
How To Decorate Cookies:
To easily decorate cooled cookies, fill resealable plastic bag with prepared frosting. Seal bag and cut small corner off one of the bottom corners of bag. Roll down top of bag to squeeze frosting over cookies to decorate as desired.