In a large pot, melt the butter over medium heat. Add the diced onion and sauté until translucent, about 5 minutes. Stir in the minced garlic and cook for an additional minute until fragrant.
Pour in the chicken broth and bring to a simmer. Add the potato gnocchi and cook according to package instructions, usually about 3-5 minutes, until they float to the top.
Reduce the heat to low and stir in the heavy cream, shredded cheddar cheese, crumbled bacon, and dried thyme. Mix until the cheese is melted and the soup is creamy.
Add the fresh spinach and cook for an additional 2-3 minutes until wilted. Season with salt and pepper to taste.
Serve hot, garnished with extra bacon and cheese if desired.