Using a dutch oven, combine the first 3 ingredients, cover with water, bring to a boil, then simmer for 15 minutes. Drain all the water reserving one cup. Add the one cup of water back into the pan with the vegetables.
Add the chicken flavored granules, the 2 cans of undrained whole kernel corn and the crumbled cooked bacon. Simmer 10 minutes more.
Melt the butter in a large pan and add the flour. Cook for about one minute and add the milk and the velveeta cheese. Cook until smooth and thick.
Combine all together and simmer over low heat until ready to serve.