Interpretation of CP violation measurements using charmonium decays, in both the B0 and Bs systems, can be subject to changes due to "penguin" type diagrams. These effects can be investigated using measurements of the Cabibbo-suppressed B0->J/\psi pi+pi- decays. The final state composition of this channel is investigated using a 1.0/fb sample of data produced in 7 TeV pp collisions at the LHC and collected by the LHCb experiment. A modified Dalitz plot analysis is performed using both the invariant mass spectra and the decay angular distributions. An improved measurement of the B0->J/\psi pi+pi- branching fraction of (3.97 +/-0.09+/- 0.11 +/- 0.16)x10^{-5} is reported where the first uncertainty is statistical, the second is systematic and the third is due to the uncertainty of the branching fraction of the decay B- -> J/\psi K- used as a normalization channel. In the J/\psi pi+pi- final state significant production of f0(500) and rho(770) resonances is found, both of which can be used for CP violation studies. In contrast evidence for the f0(980) resonance is not found, thus establishing the first upper limit on the branching fraction product B(B0->J/\psi f0(980) x B(f0(980)-> pi+ pi-) < 1.1x10^{-6}, leading to an upper limit on the absolute value of the mixing angle of the f0(980)$ with the f0(500) of <31 degrees, both at 90% confidence level.