Preheat oven to 350 degrees F (175 degrees C). Grease a 9x13-inch casserole dish.
Fill a large pot with lightly salted water and bring to a rolling boil. Add chicken breasts, bring back to a boil, and cook until chicken is no longer pink in the center, about 15 minutes. Drain chicken and reserve 1 cup of chicken water. Shred chicken.
Heat butter in a skillet over medium heat; cook and stir onion and jalapeno peppers in the melted butter until onion is softened, 5 to 10 minutes. Mix cream of chicken soup and reserved chicken water into onion mixture; stir well. Fold shredded chicken into mixture.
Line the bottom of the prepared casserole dish with tortillas; spoon chicken mixture over tortillas. Top with another row of tortillas. Repeat layering until all the chicken mixture and tortillas are used; top with Cheddar cheese.
Bake in the preheated oven until cheese is melted and lightly browned, about 20 minutes.