In a large saucepan, melt the truffle butter over low heat. Whisk in the cornstarch, salt and pepper until smooth. Gradually add the milk and bring to a boil. Cook the sauce stirring constantly until thickened, approximately 2-3 minutes. Remove from heat and stir in 1 1/2 cups of the cheese until melted. Stir in the potatoes.
Transfer to a 2 quart baking dish coated with cooking spray. Sprinkle with the remaining cheese. Cover and bake 30 minutes. Uncover and bake an additional 30-45 minutes or until the potatoes are tender and the sauce is golden brown and bubbling. Remove from the oven and allow to stand 5-10 minutes before serving.