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Heat the olive oil in a large skillet, over medium-high heat until hot.
Add the onion and jalapeno pepper. Cook and stir for 2 minutes, until onion and peppers have softened.
Add the garlic cloves and cook and stir for 2 minutes.
Stir in the canned green chilis. Cook for 1 minute.
Whisk the arrowroot powder (if using) and chicken broth until powder is dissolved.
Gradually add the chicken broth to the chili mixture, whisking constantly.
Bring the green enchilada sauce to a boil. Reduce heat and simmer for 10 minutes, or until the sauce has thickened.
Use as desired or store.