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Preheat oven to 400°F. In a small bowl, stir together breadcrumbs, 2 teaspoons fresh basil (or 1/2 teaspoon dried basil), pepper and paprika. Add melted butter; toss to coat.
Arrange chicken in a 2-quart rectangular baking dish. Sprinkle chicken with the crumb mixture, pressing to coat. Bake for 20 to 25 minutes or until chicken is no longer pink (170°F).
Meanwhile, combine milk, flour, bouillon granules and the remaining 1/4 teaspoon dried basil (if using)in a small saucepan. Cook and stir until thickened and bubbly. Cook and stir for 1 minute more. Stir in the remaining 1 teaspoon fresh basil (if using). Serve over chicken.