Sprinkle cubed steaks with 3/4 teaspoon salt and 1/2 teaspoon pepper; dip in 1/4 cup milk. Dredge steaks in 1 cup flour.
Heat oil in a large skillet over medium heat. Cook steaks 8 minutes or until golden brown, turning once. Remove steaks, reserving 2 tablespoons pan drippings in skillet. Drain steaks on paper towels, and keep warm.
Add remaining 2 tablespoons flour to pan drippings, stirring until smooth. Cook over low heat 1 minute, stirring constantly. Gradually add remaining milk; cook over medium heat, stirring constantly, until thickened and bubbly. Stir in remaining salt and pepper.
Transfer steak to a warm serving platter; serve immediately with gravy.