Docker 1.10 addresses this very nicely by introducing advanced container networking.
(Details: https://docs.docker.com/engine/userguide/networking/dockernetworks/ )
First, create a network. The example below creates a basic "bridge" network, which works on one host only. You can check out docker's more complete documentation to do this across hosts using an overlay network.
docker network create my-fancy-network
Docker networks in 1.10 now create a special DNS resolution inside of containers that can resolve the names in a special way. First, you can continue to use --link, but as you've pointed out your example doesn't work. What I recommend is using --net-alias= in your docker run commands:
docker run -i -t --name container1 --net=my-fancy-network --net-alias=container1 ubuntu:trusty /bin/bash
docker run -i -t --name container2 --net=my-fancy-network --net-alias=container2 ubuntu:trusty /bin/bash
Note that having --name container2 is setting the container name, which also creates a DNS entry and --net-alias=container2 just creates a DNS entry on the network, so in this particular example you could omit --net-alias but I left it there in case you wanted to rename your containers and still have a DNS alias that does not match your container name.
(Details here: https://docs.docker.com/engine/userguide/networking/configure-dns/ )
And here you go:
root@4dff6c762785:/# ping container1
PING container1 (172.19.0.2) 56(84) bytes of data.
64 bytes from container1.my-fancy-network (172.19.0.2): icmp_seq=1 ttl=64 time=0.101 ms
64 bytes from container1.my-fancy-network (172.19.0.2): icmp_seq=2 ttl=64 time=0.074 ms
64 bytes from container1.my-fancy-network (172.19.0.2): icmp_seq=3 ttl=64 time=0.072 ms
And from container1
root@4f16381fca06:/# ping container2
PING container2 (172.19.0.3) 56(84) bytes of data.
64 bytes from container2.my-fancy-network (172.19.0.3): icmp_seq=1 ttl=64 time=0.060 ms
64 bytes from container2.my-fancy-network (172.19.0.3): icmp_seq=2 ttl=64 time=0.069 ms
64 bytes from container2.my-fancy-network (172.19.0.3): icmp_seq=3 ttl=64 time=0.062 ms
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