Preheat oven to 350°. Combine first 3 ingredients in a medium bowl; cut in butter with a pastry blender or two forks until crumbly. (Mixture will look very dry.) Gently press mixture together with hands, pressing until blended and smooth (about 2 to 3 minutes).
Roll dough into a 10- x 8-inch rectangle on a lightly floured surface. Cut dough into 32 squares using a pastry wheel or knife. Place squares on lightly greased baking sheets; brush with milk.
Bake at 350° for 12 to 15 minutes or until lightly browned.
Baked cheese squares may be frozen up to two months.