I'm hoping to transfer to an art school next year, and I have absolutely no idea what to include in my portfolio (and what not to include). I have never put together a portfolio before and I'm absolutely and completely lost.

Well, it usually depends on what the art school specifies. I'm pretty sure on it's main website or even in the newsletter it'll have guidelines of what it wants in the portfolio.

But it's basically the BEST work you've done recently. It's usually nothing creative/personal drawings they want to see but more like human form/anatomy. How well you can observe something/still life. Values and Shading.

It's bound to say somewhere though because that's just a vague statement above since I wouldn't know your major.

They often have specifics for portfolios, as Flowery Pit said. Have a good stock of some environment observations, life drawings both human and animals, and character/background design. Show your grasp of the basics.

I suggest looking through other people's portfolios. Sheridan Illustration and Animation programs have students who post their accepted portfolios online.