Whisk together yogurt and milk in a large shallow dish.
Add chicken to yogurt mixture; cover and chill 2 to 4 hours.
Stir together flour, paprika, pepper, and 1 tsp. salt in a large shallow dish.
Remove chicken from yogurt mixture, discarding yogurt mixture. Rinse chicken, and pat dry. Dredge chicken in flour mixture, shaking off excess.
Pour oil to a depth of 11/2 inches into a 12-inch cast-iron skillet; heat over medium-high heat to 350°. Fry bacon in hot oil 2 to 3 minutes or until crisp. Transfer to paper towels; crumble bacon.
Fry chicken, in batches, in hot oil 8 to 9 minutes on each side or until done (a meat thermometer inserted into thickest portion of breast should register 170°). Drain on a wire rack over paper towels. Sprinkle with remaining 1 tsp. salt.
Serve chicken sprinkled with crumbled bacon.