Place 1 cup corn and 1 1/2 cups milk in a Dutch oven. Bring mixture to a boil over medium heat.
Combine chopped chile, onion, and 1 tablespoon water in a microwave-safe bowl. Cover and microwave at HIGH 4 minutes.
Meanwhile, place 2 cups corn and 1/2 cup milk in a blender; process until smooth.
Add pureed mixture to corn mixture in pan. Stir in chile mixture and salt, and cook 6 minutes over medium heat. Ladle soup into bowls, and top each serving with 2 tablespoons cheddar cheese.