Combine melted butter, garlic powder, onion powder and thyme in bowl.
Add potatoes to the butter mixture. Mix until potatoes are coated.
Mix in ½ cup of cheddar cheese.
Spread ½ of the potato mixture evenly amongst an 8x8 inch greased baking dish.
Heat milk in sauce pan over medium heat. Bring to a boil, string constantly.
Remove from heat, pour evenly over potatoes.
Top with remaining potatoes.
Bake in preheated oven for 45 minutes total. Set timer for 25 minutes, add the remaining cheese to top of potatoes. Set time for remaining 20 minutes and cook until potatoes are tender and cheese is melted.