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Bring 4 cups water and 1 cup chicken broth to a boil in a large saucepan over high heat. Whisk in the grits in a steady stream, then reduce the heat to low. Cook, stirring frequently with a wooden spoon, until the grits are thick and creamy and pull away from the sides of the pan, about 25–30 minutes.
Remove the grits from the heat and stir in the butter, cheddar cheese, 1/2 tsp salt, and 1/4 tsp black pepper until the cheese is fully melted and the grits are smooth. Cover and keep warm over the lowest heat setting.
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