Preheat the oven to 350°F. Place a baking rack into a large baking sheet tray. Very lightly spray with cooking spray. Set aside.
In a large heavy-duty skillet (at least 3 to 4 inches deep), on medium-high heat, place the peanut oil. Heat the oil to 350°F. While your oil is heating, you can coat your cubed steak pieces.
Set up a breading station (deep-dish pie plates work great for this) by placing the milk and eggs in one dish and whisking to combine.
In a second dish, place the flour, season salt, garlic powder, onion powder, and black pepper. Stir to combine evenly.
Dip one piece at a time of the cubed steak, into the flour mixture lightly coating both sides, then into the egg mixture on both sides, and finally back into the flour mixture. Make sure the cubed beef piece is evenly coated, beginning and ending with the flour mixture. Place breaded cubed steak on a large plate or rimmed baking tray, and repeat until all your cubed steak pieces are breaded.
Very carefully place 2 to 3 pieces (depending on the size of your skillet) of the breaded cube steak into the hot oil. Cook for 1 ½ minutes on each side or just until a light golden brown color. Don’t worry, you will finish cooking your chicken fried steak in the oven. It will get slightly darker in the oven.
Remove the golden brown pieces of chicken fried steak from the oil, allowing any excess oil to drip off, then place the pieces onto the prepared baking tray.
Repeat steps 6 and 7 until all your pieces of meat are fried.
Place your fried cubed steak that is on the sheet tray into the oven to finish cooking for 20 minutes.
While your chicken fried steak is in the oven, you can make your gravy by placing, in a medium saucepan, the 4 tablespoons butter and ¼ cup flour. Cook on medium heat for 2 to 3 minutes, whisking until the butter has absorbed the flour and is a pale gold color. Slowly pour the milk, whisking constantly to avoid lumps, into the saucepan with butter and flour mixture. Add the kosher salt and black pepper to the gravy and allow it to cook and thicken. This will take about 5 minutes. Make sure to whisk often to avoid burning the milk.
Once the gravy has thickened, turn off the heat.
When the chicken fried steak is done cooking, plate each piece and top with the gravy.