Remove label from the can of condensed milk. Place unopened can in a 3 1/2- to 4 1/2-quart slow cooker. Pour water into the slow cooker until the can is completely covered with water. Put lid on the slow cooker.
Cook on High for 3 1/2 to 4 1/2 hours, making sure the can is always covered with water. Remove hot can with tongs; allow to cool until safe to handle, at least 25 minutes. Open can and pour contents into a lidded bowl. Stir in vanilla extract.
