Automatically Set Featured Image from First Image in Post

function auto_set_featured_image() {

    global $post;

    if (!has_post_thumbnail() && $post->post_type == 'post') {

        $attached_image = get_children("post_parent=$post->ID&post_type=attachment&post_mime_type=image&numberposts=1");

        if ($attached_image) {

            foreach ($attached_image as $attachment_id => $attachment) {

                set_post_thumbnail($post->ID, $attachment_id);

                break;

            }

        }

    }

}

add_action('save_post', 'auto_set_featured_image');