Line a baking sheet with a silicon baking mat or parchment paper. Set aside.
In a large mixing bowl, cream butter with an electric mixer for 30 seconds.
Add both sugars and cream until light and fluffy, about 2 minutes.
Add egg and vanilla and mix on low just until incorporated.
In another mixing bowl, whisk together the dry ingredients (flour, pudding mix, baking soda and salt).
Add the dry ingredients to the wet ingredients and stir just few times. Add 1 cup of the semi-sweet chocolate chips, reserving the rest for placing on top of cookie dough balls. Mix until all flour mixture is incorporated.
Scoop the dough with a medium cookie scoop (1 and ½ tablespoon size). Place one caramel square in the middle of the dough ball and press half way down. Scoop another cookie dough ball and place on top. Roll in your hands until one big ball is formed and the caramel is well hidden in the center. Place on a cookie sheet. Place few chips on the ball, pressing gently.
Bake the cookies for 9 to 11 minutes. Cool cookies for at least 10 minutes on the cookie sheet. Transfer onto a cooling rack.