Using a proton-proton collision data sample collected by the LHCb experiment, corresponding to an integrated luminosity of 8.5 fb$^{-1}$, the observation of a new excited $Xi_b^0$ resonance decaying to the $Xi_b^-pi^+$ final state is presented. The state, referred to as $Xi_b(6227)^0$, has a measured mass and natural width of $m(Xi_b(6227)^0) = 6227.1^{,+1.4}_{,-1.5}pm0.5$ MeV, $Gamma(Xi_b(6227)^0) = 18.6^{,+5.0}_{,-4.1}pm1.4$ MeV, where the uncertainties are statistical and systematic. The production rate of the $Xi_b(6227)^0$ state relative to that of the $Xi_b^-$ baryon in the kinematic region $2<eta<5$ and $p_{rm T}<30$ GeV is measured to be $frac{f_{Xi_b(6227)^0}}{f_{Xi_b^-}}{mathcal{B}}(Xi_b(6227)^0toXi_b^-pi^+) = 0.045pm0.008pm0.004$, where ${mathcal{B}}(Xi_b(6227)^0toXi_b^-pi^+)$ is the branching fraction of the decay, and $f_{Xi_b(6227)^0}$ and $f_{Xi_b^-}$ represent fragmentation fractions. Improved measurements of the mass and natural width of the previously observed $Xi_b(6227)^-$ state, along with the mass of the $Xi_b^-$ baryon, are also reported. Both measurements are significantly more precise than, and consistent with, previously reported values.