Heat the olive oil in a large skillet over medium heat. Add the diced onion and sliced mushrooms, sautéing until softened and fragrant, about 5-7 minutes. Stir in the garlic powder and onion powder, cooking for another minute. Pour in the cream of mushroom soup, chicken broth, and milk, stirring until smooth and combined. Let the mixture simmer for 3-4 minutes until it thickens slightly.
In a mixing bowl, combine the cooked shredded chicken, uncooked long-grain rice, and the mushroom gravy mixture from the skillet. Add salt and pepper to taste, then stir everything together until the rice is evenly coated with the sauce.
Preheat your oven to 350°F (175°C). Pour the mixture into a greased 9x13-inch casserole dish, spreading it out evenly. If using, sprinkle the shredded cheddar cheese evenly over the top for a golden, bubbly crust.
Cover the casserole with aluminum foil and bake for 40 minutes. Then remove the foil and bake for an additional 10-15 minutes, or until the cheese is melted and the rice is tender. Let it rest for about 5 minutes before serving.
