You can install a quadcore. 2720QM is been tested working. http://forum.notebookreview.com/threads/t420-upgrade-to-i7-2720qm-es-q154-su...
The probably fastest CPU that the T420 could get cooled is the Core i7-2860QM (45W TDP).
Official dualcore CPUs have a TDP of 35W. Those inofficial working quadcore CPUs have a TDP of 45W. The minimal requirement to get those quadcore CPUs working is to apply the very best thermal paste you can get for money. At the moment this is the "Thermal Grizzly Kryonaut". Otherwise your CPU would start overheating and throttling when you use for example a old and inefficient Arctic Silver 5.
Untested/unknown: If a ivy bridge CPU would work. The OEM bios didn't had support for those.
5. Feb 2017 18:33 by davidthornes at outlook.com :
Hello All, I have a question for people running coreboot on T420Can you please suggest the fastest CPU i can upgrade to without too many heat issues ?i can use more powerful ( 90W i think ) power brick if needed ..thank you everyone.David.