Sail east along the coast from Magic Valley, after you enter Valley of 1000 Rivers, look for a path going up the hill. The cave is at the top. When you click on it, you can recruit many emerald dragons.

Ah okay, so I was looking in the wrong place after all. I was convinced the place to recruit them would be a big huge cave with several emerald green dragon guardians. :rolleyes:

A lot of the game is random, but I think that both versions are right:
1. in the huge underwater cave in thousand rivers,
2. also in magic valley
and I would add third option:
3. sometimes I find them in the undead lands (together with red/black dragons) - but very rarely