Melt butter in a medium saucepan over medium-high heat.
Add the mushrooms to the pan and cook until softened and browned, about 5 minutes.
Sprinkle the flour over the mushrooms and stir to coat them evenly.
Slowly pour in the chicken broth and milk, stirring constantly to prevent lumps from forming.
Increase the heat to high and bring the gravy to a boil. Then, reduce heat to low and simmer until the gravy has thickened to your desired consistency, about 2 to 3 minutes.
Serve the mushroom gravy over schnitzel. Enjoy!