Needle Ice forms on the ground through a process called Ice Segregation.
During the Ice Segregation Process the cold water moves through a medium toward the presence of ice, freezes at the interface and adds to the ice.
When this occurs at or near the surface of soil it produces what we know and see as Needle Ice, which takes the form of strands of ice rising vertical from the surface or near surface of the soil.
The needle ice is formed when the ground temperature is above freezing but the air temperature is below freezing.
Through capillary action the needle ice is able to form.
There's also another form of ice that occurs called hair ice which is a relative to the needle ice.
Seeing needle ice and hair ice form is really cool and I've seen needle ice form mostly in Tennessee but it can form in other places as well.