In a large pot, cook bacon over medium heat until crispy. Remove and set aside, leaving drippings in the pot.
Add onion to the pot and cook until softened. Stir in garlic and cook until fragrant.
Sprinkle flour over the mixture and stir to combine. Cook 1 minute.
Slowly whisk in chicken broth, then add milk. Bring to a gentle simmer.
Add gnocchi and cook until tender (about 3–4 minutes).
Reduce heat to low and stir in cheddar cheese until melted and smooth.
Add cooked bacon back to the pot. Season with salt and pepper.
Serve warm, garnished if desired.