Heat the olive oil in a large pot over medium heat. Add the diced onion and sauté until translucent, about 5 minutes. Stir in the minced garlic and cook for an additional 1-2 minutes until fragrant.
Add the shredded chicken to the pot, mixing well with the onions and garlic. Pour in the chicken broth and add the diced tomatoes with green chilies. Stir to combine and bring to a simmer.
Reduce the heat to low and add the softened cream cheese to the pot. Stir until the cream cheese is completely melted and incorporated into the soup.
Add the chopped jalapeños, chili powder, and cumin to the pot. Mix well, and let the soup simmer for another 10-15 minutes. Adjust the seasoning with salt and pepper as needed.
Stir in the shredded cheddar cheese and milk, allowing the cheese to melt and the soup to become creamy. Let it cook for an additional 5 minutes, stirring occasionally.
