Brown the chicken. Heat the olive oil in a large Dutch oven or deep oven-safe skillet over medium-high heat. Pat the chicken pieces dry and season with 1/2 teaspoon of the salt and all the pepper. Add to the hot pot in a single layer. Let it sear without moving for 3-4 minutes, until you get a deep golden-brown crust. Flip and cook another 2-3 minutes. It doesn’t need to be cooked through yet. Remove to a plate.
Build the base. In the same pot, add the onion, garlic, and mushrooms. Cook, stirring occasionally, for about 5 minutes. The mushrooms will release their liquid and start to turn golden. Sprinkle the flour over the veggies and cook, stirring constantly, for 1 full minute. This cooks out the raw flour taste and is the secret to a smooth, thick sauce for your easy chicken and noodle casserole.
Create the creamy sauce. Slowly pour in the chicken broth while scraping the bottom of the pot with a wooden spoon. All those browned bits will loosen and dissolve into the sauce. Stir in the milk, sour cream, dried thyme, and remaining 1/2 teaspoon of salt. Bring to a gentle simmer. The sauce will thicken slightly.
Cook the noodles. Stir in the uncooked egg noodles and the frozen peas. Make sure the noodles are mostly submerged. Return the browned chicken (and any juices) to the pot. Reduce heat to medium-low, cover, and let it bubble gently for 10-12 minutes. Stir once halfway through to prevent sticking. The noodles should be tender and have absorbed much of the liquid.
Add the cheese and bake. Preheat your broiler. Remove the pot from the heat. Stir in 1 cup of the cheddar cheese and all the Parmesan until melted and creamy. Taste and adjust seasoning. Sprinkle the remaining 1/2 cup cheddar evenly over the top. This final step for your easy chicken and noodle casserole creates that irresistible, bubbly, golden top.
Broil to perfection. Place the pot under the broiler for 2-4 minutes. Watch it closely! You want the cheese melted and spotted with deep golden brown, not burned. It happens fast. You’ll hear it sizzle. Pull it out when the top is gloriously blistered. Let it sit for 5 minutes—this helps it set. Garnish with fresh parsley.