We present a systematic study of the electronic structure of strained La₃Ni₂O₇ thin films. We show that biaxial compressive strain mainly elongates the outer apical Ni-O bond while leaving the inner apical Ni-O bond nearly unchanged. As a result, the Jahn-Teller splitting Δ_JT is strongly enhanced, whereas the interlayer d_(z²) hopping t_⊥ᶻ changes only weakly. Since superconductivity is widely believed to emerge only below a critical in-plane lattice constant, our results identify the strain-enhanced Δ_JT as the relevant microscopic tuning parameter. Consistently, the calculated Fermi surfaces and Hall response for LaAlO₃ and SrLaAlO₄ substrates agree with ARPES and Hall measurements. Our results identify Jahn-Teller distortion as a key tuning parameter in strained La₃Ni₂O₇ and support its central role in optimizing superconductivity in bilayer nickelates.