Remove the 8 ounces fat-free cream cheese from the package and let it soften at room temperature about 15–20 minutes; alternatively, cut it into pieces and warm briefly in the microwave (5–10 seconds) until just softened, not melted.
Drain the 4 ounces jarred diced pimentos and pat lightly if needed. Seed and mince the 1 small jalapeño pepper. Dice the 1 green onion and mince the 1 garlic clove.
Place the softened cream cheese, 1/2 cup plain fat-free Greek yogurt, and 2 cups reduced-fat shredded cheddar cheese into a food processor. Add the drained diced pimentos, diced green onion, minced garlic, minced jalapeño, 1/4 teaspoon black pepper, and 1/4 teaspoon cayenne pepper.
Pulse the food processor until the mixture is well combined and reaches your desired texture (a few short pulses for a chunkier spread, longer pulses for smoother). If using an electric mixer instead, put all ingredients in a mixing bowl and beat on medium-low until creamy and combined.
Taste the spread and add kosher or sea salt to taste, stirring or pulsing just until evenly incorporated.
Transfer the pimento cheese spread to a glass-covered container, smooth the top, seal, and refrigerate for at least 1 hour to chill and let the flavors meld.
Stir the chilled spread before serving and adjust seasoning if needed.